Syrma SGS Technology IPO Review

Aether Industries IPO plans to raise ₹ 808 crores during its IPO opening on 24th May and closing on 26th May 2022. The company has fixed the price band from ₹ 610 to ₹ 642 per equity share. The IPO is a combination of fresh issue and OFS portion with a fresh issue of Rs 627 crore and an offer for sale of up to 28.2 lakh shares by promoter Purnima Ashwin Desai. The Surat based Aether Industries Limited manufactures advanced intermediates and specialty chemicals that involve complex and differentiated chemistry and technology core competencies.

Bidding date12th Aug’2022  to 18th Aug’2022
Issue  Fresh766 crores
OFS3,369,360 Equity shares
Issue Details
Issue Size  (₹ Cr) ₹ 836 – 840 Cr
Issue Size  (Shares)40,020,078 – 38,187,541  shares
Face ValueRs. 10
Bid Lot shares68
Price Band₹ 209 – 220
Issue Structure :
Retail35%; 294  crore ; 1.34 cr shares
Appl. for 1x Retail~ 2 Lac

About Syrma SGS Technology

  • Specializes in high-mix, flexible-volume, precision global OEM electronics manufacturing services and developing RFID technology.
  • Positioned as an EMS partner with excellent manufacturing capability, wide product expertise, and a global presence.
  • Catering to high-growth, industries, including automotive, industrial, consumer and IT segments
  • It provides services and solutions to original equipment manufacturers – from the initial product concept stage to volume production.
  • Syrma’s product portfolio includes printed circuit board assemblies, radio frequency identification products, electromagnetic and electromechanical parts, memory products like USB drives and motherboards. •New areas like Designing Electromagnetic Components for Aerospace, miniature electronics for wearables.
  • The company operates 11 manufacturing plants in Himachal Pradesh, Haryana, Uttar Pradesh, Tamil Nadu and Karnataka and has three research & development facilities in India and one in Germany.
  • Customers include TVS Motor Company, AO Smith India Water Products, Robert Bosch Engineering and Business Solution, Eureka Forbes, Hindustan Unilever and Total Power Europe.

Anchor Book: Syrma SGS Technology IPO

Syrma SGS has raised Rs 252 crore from from 18 anchor investors.
38.19 lakh shares to 7 domestic mutual fund schemes across 5 AMCs. The mutual fund allocation represents 33.33% anchor allocation.
Some select Investors.

Anchor Investor% of anchor bookInvestment
Nomura India Stock Mother Fund            11.90%Rs.30.00 crore
ICICI Prudential ESG Fund            11.90%Rs.30.00 crore
Volrado Venture Partners            11.90%Rs.30.00 crore
ICICI Prudential Flexi Cap Fund            9.16%Rs.23.08 crore
Franklin India Smaller Companies Fund            6.35%Rs.16.00 crore
Tata India Tax Saving Fund            6.35%Rs.16.00 crore
Malabar Select Fund            5.95%Rs.15.00 crore
Kuber India Fund            5.95%Rs.15.00 crore
BNP Paribas Arbitrage Fund – ODI            5.16%Rs.13.01 crore
IDFC Emerging Business Fund            3.97%Rs.10.00 crore
IIFL Special Opportunities Fund            3.97%Rs.10.00 crore
Abakkus Emerging Opportunities Fund            3.18%Rs.8.00 crore

Salient Points

  • The Offer is mainly an issue of fresh equity shares.
  • Raised Rs. 110 cr in May 2022 via pre-IPO placement at Rs. 290.
  • Malabar and IIFL funds participated in it. IPO now priced at Rs. 220 (at upper end)
  • From the fresh issue proceeds: Rs. 403cr will be used to fund the capital expenditure. Rs. 131.6cr will be utilized for funding the working capital.
  • Currently operating at 75-85% utilization.
  • 45% revenue of Syrma come from Exports.
  • The company operates in B2B space.
  • 16 customers of Syrma have been there for more than 10 years.

Aether Industries IPO: Financials

Particulars / (₹ In Cr)2021(09) 2020(09) Fy21FY20Fy19
Reserves 247.59117.84164.2369.7229.99
Net worth as stated 360.28126.4174.3378.2838.55
Revenue from Operations 442.54334.09449.82301.81201.18
Revenue Growth (%) 32.46%– 49.04%50.02%– 
EBITDA as stated 125.9976.54112.1671.7647.51
EBITDA (%)28.47%22.91%24.93%23.78%23.61%
Net Profit for the period 82.9148.2571.1239.9623.34
Net Profit (% )18.45%14.30%15.67%13.15%11.48%
Equity Share Capital 112.698.5610.18.568.56
EPS-Basic & Diluted (₹ ) 7.45^ 5.12^ 7.364.242.48
NAV – Basic (₹ ) 20.8511.8115.698.314.09
Post IPO Equity in cr124.48
IPO Price642
EPS ( FY21)5.71
PE FY21112.37
EPS  annaulized (9m FY22)8.88
PE FY22 ann72.29
Market Cap in Rs. Cr. 7992
Market Cap / Sales 13.54


  • Company’s acquisitions include the acquisition of Tovya Automation in December 2014, the merger of 3G Communication Pvt Ltd effective from April 2016, and most recently, their acquisition of SGS Tekniks in September 2021 and Perfect ID in October 2021
  • In November 2020, Syrma first acquired a 20% stake in SGS. SGS was to be merged with Syrma, however, the merger was called  off and Syrma acquired 100% stake in SGS.
  • The erstwhile promoters of SGS now hold 9.23% share each in Syrma, totaling  to 37%. •SGS, incorporated in 1986, is an Indian EMS company that primarily assembles PCBs for its clients. •
  • n terms of customer and geographical profile, there is no overlap between Syrma and SGS, thus diversifying client and geographic profile.
  • Syrma also acquired 75% stake in Perfect ID India Private Limited in October 2021. PerfectID manufactures RFID label tags and passive inlay tags, which is in addition to the existing capabilities for the manufacturing of RFID hard tags  by Syrma.


  • Change in favorable government policies and regulations
  • delay in expanding capacity
  • unfavorable forex movements
  •  working capital-intensive operations
  • Competition
  • Syrma SGS Technology IPO: Assessment
  • Expected CAGR of India’s electronic manufacturing services sector is 25- 30%
  • With planned additional capacity Syrma is well placed.
  • Syrma is undertaking Rs. 570 crore  capex over 2 years.
  • Wide product basket
  • engineering and design capability
  • diverse customer base
  • Backed by a better product mix, strong R&D capabilities
  • The company has long standing relationships with customers
  • Syrma SGS Technology is adding capacities to capitalise on domestic and global opportunities.
  • Manufacturing facilities in Tamil Nadu,  are placed in SEZs.
  • Syrma is the first in India to manufacture Radio Frequency Identification (“RFID”) products
  • Over FY20-22:
    • 21% CAGR growth in consolidated revenue to Rs. 1,266 cr in FY22
    • Profitability has been in declining trend.
    •  Business from Industrial, Consumer and Automotive sectors increased by 15.8%, 15.1% and 37.4% CAGR. Business from the Healthcare declined by 11.5% CAGR.
  • Syrma Tech may almost double their capacity with new acquisitions.
  • Issue seems to be fully priced and it may fall as a moderately risk bet on fast-growing electronics sector in the country.
  • But one should keep in mind
    • Substantial Expansion Underway  high growth potential in the electronic manufacturing sector.
    • cross sell opportunity for the acquisitions.
    • Likely incentives under PLI for white goods and telecom products.

Syrma SGS Technology IPO: Apply or Not

Risk : Moderate to Low
Expected Reward : Low /Moderate Profit to Low Loss
Listing Gains : Possible. Current GMP Rs. 30
Hold for Medium/ Long Term: Sector is good but needs matching performance
Subscription : Expected to be Good
I am likely to apply in this IPO, Will do so after watching response on Day 2/3. chances of my applying are quite high.
Above are my views only. Please do your own diligence.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.



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