The grey market premium (GMP) of Cyient DLM is around Rs 150-155 in the unlisted market. If we consider the upper price band of Rs 265, the company’s shares are expected to list at a premium of 58%.
However, it is important to note that grey market premiums are just an indicator of how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.
Cyient DLM’s public offer received a massive response from investors, with the subscription at 71.3 times.
The net proceeds from the issue will be used towards funding incremental working capital requirements, capital expenditure, repayment of debt, and other general corporate purposes.
Axis Capital and JM Financial are the book-running lead managers to the issue, while KFin Technologies is the registrar.
Cyient DLM is an integrated electronic manufacturing service (EMS) and solutions provider with a focus on the entire life cycle of a product, including design, build, and maintenance.The company enjoys long-term relationships with marquee customers such as Honeywell, Thales Global Services, ABB, Bharat Electronics, and Molbio Diagnostics, having had an average relationship of over 11 years.
At the upper price band, Cyient DLM is available at a P/E of 66.2x FY23 earnings, aligning with industry peers’ valuations, according to analysts.
For the financial year ending March 2023, the company’s revenue from operations grew 15% to Rs 832 crore, while profit for the same period stood at Rs 31.7 crore, up by 4%.
The company derives a major part of its revenues from printed circuit board assembly (PCBA) with almost 63% contribution, and 32% of the revenue comes from box builds used in safety-critical systems such as cockpits, inflight systems, landing systems, and medical diagnostic equipment.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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