Syrma SGS Technology’s IPO entered its final day of bidding today after being oversubscribed by investors. The public offering, valued at Rs 840 crore, was opened for subscription last week after attracting reasonable interest from anchor investors. In the Syrma SGS public offering, all investor categories oversubscribed their shares, with the exception of Qualified Institutional Buyers (QIB). In the unlisted sector, the premium for Syrma SGS Technology shares has fallen to Rs 30-35 per share. The gray market premium was just 15 rupees a share at the start of the week but was trading at 40 rupees a share yesterday.
Total subscription to Syrma SGS Technology’s IPO has reached 2.27 times, with bids received for 6,48,39,020 shares versus 2,85,63,816 shares offered. Retail investors were the first to fully subscribe for their stake. Prior to the final bid day, the retail portion of the IPO was subscribed 2.66 times. Bids in the retail category were received for 3,72,90,384 shares versus the 1,40,07,027 shares offered. Non-institutional investors (NII) have also oversubscribed their stake in the Syrma SGS IPO. The NII share was subscribed 3.58 times as bids were received for 2.15.10.100 shares while only 60.03.012 shares were offered. QIBs were largely absent until yesterday, but now the category drawing stands at 0.71x.
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Syrma SGS Technology gray market premium hovered around 30-35 rupees per share on Thursday. The gray market premium had risen to Rs 40 yesterday from Rs 15 last week but has now pared some gains.
The Syrma SGS IPO remains open for subscription today. Investors can bid for the issue in the fixed price range of Rs 209-220 per share in a bid lot of 68 shares. The public offering is largely a new issue of shares accompanied by an offer for sale (OFS). The engineering and design firm’s issuance is valued at 50.7 times FY22 EPS of Rs 3.2/share on a post-issuance fully diluted share basis, according to analysts at ICICI Direct, at the high end of the price range. The brokerage firm has not rated the issue.
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Analysts at Geojit Financial Services have a Subscribe rating. “In the upper price range of Rs 220, SSTL is available at a P/E of 50.7x (FY22), which is available at a discount to its peers. Given the good financial performance, strong focus on R&D, capacity expansion plans, positive industry prospects with government support from PLI programs and China, and a strategy by multinational companies, we assign a “subscribe” rating to the issue over the medium to long term base,” they said.
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