Avalon Technologies Share Price: Shares of Avalon Technologies made a muted debut at Dalal Street on Tuesday. The scrip was listed at Rs 431 on the BSE, at 1 per cent discount when compared with its issue price of Rs 436 on Tuesday. The listed at par on the NSE.
At 10:30 AM; Avalon quoted 5 per cent lower at Rs 415 on BSE. A combined 2.1 million equity shares changed hands at the counter on both the exchanges.
Just a day ahead of its listing, shares of Avalon Technologies were commanding a muted premium of Rs 8-10 per share in the grey market, suggesting a mild gain to the investors on their maiden trading session.
Incorporated in 1999, Avalon Technologies has end-to-end capabilities in delivering box-build solutions in India, focusing on high-value precision-engineered products. It has 12 manufacturing units located across the US and India offering a variety of solutions and services to its clients.
The initial public offering (IPO) of Avalon Technologies was open for subscription between April 3 and April 6 as the company was looking to raise Rs 865 crore from the primary markets. It has fixed the issue price in the range of Rs 415-436 apiece with a lot size of 34 equity shares.
The issue was overall subscribed merely 2.34 times, thanks to qualified institutional buyers (QIBs), whose portion was booked 3.77 times. The quota for non-institutional investors (NIIs) and retail bidders failed to get subscriptions as their allocation was booked by 43 per cent and 88 per cent, respectively.
Avalon is a fully integrated electronic manufacturing services (EMS) company, catering to global clients into clean energy, mobility, industrial and communications domains. The company earned ~62 per cent (FY22) of its total revenue from exports (mainly to the US) while the rest comes from the domestic market.
The company’s consolidated revenue grew at a CAGR of ~14 per cent in FY20-22 led by clean energy segment (EV, solar, hydrogen) which grew at ~30 per cent CAGR during the same period. Despite higher raw material costs, the EBITDA margin increased 160 bps to 11.6 per cent supported by savings in employee and other costs. PAT grew ~5.5x to Rs 68 crore tracking one-time gains and EBITDA margin expansion.
What should Investors do Now?
Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said: “Avalon Technologies Ltd. made its debut in the market at a listing price of 436. The company’s issue price was Rs 415-436, so shares are listed at par with no profit and no loss. Avalon Technologies is a fully integrated EMS company with end-to-end operations that deliver box-build solutions in India. The company operates in a business with high entry barriers and has a global delivery footprint. Despite its strong and stable financial performance, Avalon Technologies experienced a decline in its PAT margin during the first eight months of FY22 and currently has a high debt ratio. Investors with a high-risk tolerance may consider holding Avalon Technologies Ltd. shares long-term, with a recommended stop loss of around 405, which is the lower price band of the issue.”
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