IPO Synopsis
Elin Electronics Ltd filed draft papers with the SEBI to raise ~Rs.760 crores through an IPO
The IPO is divided into a fresh issue of shares worth Rs.175 crores and an offer for sale of up to Rs.85 crores.
The existing shareholders and promoters will take part in OFS. It comprises shares worth up to Rs.32.10 crore by Kamal Sethia, up to Rs.52.50 crore by Kishore Sethia, Rs.47.40 crore by Gaurav Sethia, Rs.12.20 crore by Sanjeev Sethia, Rs.15.60 crore by Vasudha Sethia, and up to Rs.9.10 crore by Vinay Kumar Sethia.
Axis Capital and JM Financial are the lead managers to the issue.
Objective of the issue
1) The firm will use Rs.80 crores to repay debt and Rs.48.97 crore to upgrade and expand its existing facilities at Ghaziabad, Uttar Pradesh and Verna, Goa.
2) The net debt stands at Rs.127.51 crore.
About Elin Electronics Ltd
The company is a leading electronics manufacturing services (EMS) provider of end-to-end product solutions and is one of the largest fractional horsepower motors manufacturers in India. It's product portfolio includes LED lighting, fans and switches; small appliances; fractional horsepower motors; medical diagnostic cartridges; plastic moulded and sheet metal parts and components; and other miscellaneous products such as terminal block, stainless steel blade, die casting and radio sets.
EMS market in India is valued at Rs. 2,65,400 crores in 2021, and its estimated value by 2026 is Rs. 9,96,300 crores with a CAGR of 30.3%. Elin Electronics held a market share of 12 % in 2021. It is one of the key players in LED lighting and flashlight with EMS market share of ~7%, and also one of the key players in small appliances vertical with EMS market share of 10.7% in 2021. The company owns three manufacturing facilities strategically located in Ghaziabad (Uttar Pradesh), Baddi (Himachal Pradesh) and Verna (Goa). The large scale setup includes 149 units of molding machines and 105 units of power presses which enables bringing efficiencies and economies of scale.
The key customers by business verticals include:
1) LED lighting, fans and switches: Signify Innovations and Eveready.
2) Small appliances: Philips, Bosch, Faber, Panasonic and Usha.
3) Fractional horsepower motors: Havells, Bosch, Faber, Panasonic, Preethi (owned by Philips), Groupe SEB (Maharaja brand) and Usha.
4) Medical diagnostic cartridges: Molbio Diagnostics Private Limited.
5) Moulded and sheet metal parts and components: Denso and IFB.
Elin Electronics Ltd Financial Status
|
Particulars (In Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Revenue |
862.38 |
785.58 |
828.55 |
|
EBITDA |
69 |
56.24 |
58.214 |
|
PAT |
34.87 |
27.49 |
29.07 |
|
EPS (basic in Rs.) |
8.53 |
6.73 |
7.12 |
|
RoNW% |
13.29% |
12.07% |
14.61% |
|
ROCE% |
18.55% |
17.08% |
20.86% |
|
Particulars (In Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Total Assets |
508.31 |
387.63 |
397.73 |
|
Share Capital |
6.81 |
6.81 |
4.96 |
|
Total Borrowings |
113.77 |
69.89 |
86.64 |
|
Total Assets |
508.31 |
387.63 |
397.73 |
|
Particulars (In Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Net cash inflow from operating activities |
-33.64 |
76.81 |
28.32 |
|
Net Cash flow from investing activities |
-4.95 |
-42.42 |
-31.84 |
|
Net Cash flow from financing activities |
34.19 |
-28.44 |
-3.72 |
|
Net increase/(decrease) in cash & cash equivalents |
-4.4 |
5.96 |
-7.25 |
Peer Comparison
|
Name of Company |
Face Value (Rs. Per Share) |
Revenue, for FY2021 (in Rs. crores) |
EPS (Basic) |
P/E |
NAV (Rs. per share) |
RONW (%) |
|
Elin Electronics Limited |
2 |
864.9 |
8.53 |
NA |
69.16 |
6.84% |
|
Dixon Technologies (India) Ltd |
5 |
6449.75 |
27.49 |
187.2 |
125.89 |
21.67 |
|
Amber Enterprises India Limited |
10 |
3063.62 |
24.96 |
134.02 |
486.92 |
5.08 |
Key Points for Elin Electronics IPO are:-
Key Points
-
Strengths
1. Has an established and strong hold on market position in key verticals including leadership in fractional horsepower motors.
2. Diversified products resulting in a de-risked business model.
3. Entrenched relationships with a marquee customer base.
4. High degree of backward integration resulting in higher efficiencies, enhanced quality of products and customer retention capability.
5. Consistent and strong track record of financial performance. -
Risks
1. There is no guarantee that the firm can retain the business with its (new or existing) customers after completing contracts, adversely affect the profitability and results of operations.
2. The manufacturing facilities are critical to the business. Thus, any disruption in the continuous operations of them would have a material adverse effect on the business, and profitability.
3. If the firm fails to optimally utilise its well-versed backward integration to enhance and support the business, then reliance on third party suppliers may possibly cause delays in timelines and increase in input cost (on short notice).
4. The EMS industry is rapidly changing and evolving. The company may fail to keep up with the latest trends and fail in adopting new ODM capabilities and technology.
5. The technical knowledge may not be adequately protected by intellectual property, but only by secrecy, which cannot keep things confidential for long and may lead to the firm losing out on its competitive edge.
6. The firm relies on third party transportation providers to supply most of the raw materials and deliver products to its customers, hence, there could possibly be failures in these continuous supply or delivery process in an efficient and reliable manner.
How to apply for an IPO?
-
Login to your 5paisa account and select the issue in the
current IPO section -
Enter the number of lots and price at which you wish to
apply for -
Enter your UPI ID and click on submit. With this, your
bid will be placed with the exchange -
You will receive a mandate notification to block funds in
your UPI app -
Approve the mandate request on your UPI and funds
will be blocked
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FAQs
Elin Electronics IPO details are yet to be announced.
Elin Electronics IPO details are yet to be announced.
Elin Electronics IPO details are yet to be announced.
The IPO issue size is worth Rs.760 crores. (Fresh Issue worth Rs.175 crores and OFS worth Rs.585 crores)
The promoters of the firm are:
1. Mangi Lall Sethia,
2. Kamal Sethia,
3. Kishore Sethia,
4. Gaurav Sethia,
5. Sanjeev Sethia,
6. Sumit Sethia,
7. Suman Sethia,
8. Vasudha Sethia
9. Vinay Kumar Sethia
Elin Electronics IPO details are yet to be announced.
Elin Electronics IPO details are yet to be announced.
Axis Capital and JM Financial are the book-running lead managers to the IPO.
The firm will use Rs.80 crores to repay debt and Rs.48.97 crore to upgrade and expand its existing facilities at Ghaziabad, Uttar Pradesh and Verna, Goa.
To apply for the IPO, follow the steps given below
1. Login to your 5paisa account and select the issue in the current IPO section.
2. Enter the number of lots and price at which you wish to apply for.
3. Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange.
4. You will receive a mandate notification to block funds in your UPI app.
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