Elin Electronics IPO Details and Review (Invest or Avoid)

New Delhi based Elin Electronics IPO would open for subscription on 20th December 2022. Elin Electronics Limited is a leading electronics manufacturing services provider in India. Company has generated strong revenue growth in the last few years with consistent margins. Should you invest in Elin Electronics IPO?

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About Elin Electronics Limited

Company is a leading electronics manufacturing services (EMS) manufacturer of end-to-end product solutions for major brands of lighting, fans, and small/ kitchen appliances in India. It is also one of the largest fractional horsepower motors manufacturers in India.

Based on the overall market, they are projected to be the largest players in this category, with a market share of 12% in Fiscal 2021. In addition, they are one of the key players in LED lighting and flashlight with the EMS market share of approximately 7% in Fiscal 2021, and are also one of the key players in small appliances vertical with EMS market share of 10.7% in Fiscal 2021.

Elin Electronics IPO Details and Review (Invest or Avoid)

Elin Electronics IPO – Key Details

Opening Date 20-Dec-22
Closing Date 22-Dec-22
Issue Type Book Built Issue IPO
Face Value Rs 5 per equity share
IPO Price band Rs 234 to Rs 247 per equity share
Lot Size 60 Shares
Min Order Quantity 60 Shares
Listing at BSE and NSE
Total Issue Size Rs. 475 Crores
    Fresh issue     Rs. 175 Crores
    OFS     Rs. 300 Crores

Elin Electronics IPO RHP

What are the strengths of Elin Electronics Limited?

1) Established 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

What are the Objects of the IPO Offer?

Elin Electronics IPO Size is Rs 475 Crores which contains OFS and fresh issue

1) OFS of Rs 300 Crores – Under OFS, selling shareholders would sell their shares and the company would not get any money from this IPO proceeds.

2) Fresh issue Rs 175 Crores – It would be used for the following:

Repayment/ prepayment, in full or part, of certain borrowings availed by the Company.

Funding capital expenditure towards upgrading and expanding existing facilities at (i) Ghaziabad, Uttar Pradesh, and (ii) Verna, Goa.

General corporate purposes

Who are the promoters of Elin Electronics Limited?

Mangi Lall Sethia, Kamal Sethia, Kishore Sethia, Gaurav Sethia, Sanjeev Sethia, Sumit Sethia, Suman Sethia, Vasudha Sethia and Vinay Kumar Sethia are the promoters of the company.

How is the company financial track record?

Here are the total assets, revenues and profits of the company in the last 3 years and 6 months.

Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22 30-Sep-22
Total Assets 387.6 508.3 532.6 589.2
Revenues 786.4 864.9 1,094.7 604.7
Profit After Tax 27.5 34.9 39.2 20.7
Profit % 3.50% 4.03% 3.58% 3.42%

Why to invest in Elin Electronics IPO?

Here are the positive factors in this company.

1) Elin Electronics Limited is a leading electronic manufacturing services provider in India. Company has diversified products portfolio.

2) Company generated strong revenue growth in the last few years.

3) Company is generating consistent margins in the last few years.

Risk Factors of investing in Elin Electronics IPO

1) IPO proceeds contains OFS portion where the company would not get anything from this.

2) Company is highly dependent on certain key customers for substantial portion of its revenues. Loss of relationship with any of these customers may affect company business.

3) Company past profitability ratios have been low. There is no guarantee that the profitability ratios will improve in future and company will be able to generate higher returns.

4) COVID-19 pandemic or a similar public health threat, could adversely affect company business.

5) They have incurred significant capital expenditure in the past and will continue to incur significant capital expenditure in the future, and such expenditure may not yield the benefits we anticipate.

6) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.

How to buy Elin Electronics IPO online through Zerodha?

If you do not have Zerodha account, sign-up here and proceed to the next step.

If you have a demat account with Zerodha, you can apply this IPO online using the UPI as a payment gateway. Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.

Follow below steps to apply this IPO in Zerodha platform:

1) Visit the Zerodha portal and login to the console.

2) Go to Portfolio and click the IPOs link.

3) Visit ‘Elin Electronics Limited IPO’ row and click the ‘Bid’ button.

4) Enter your UPI ID, Qty and the Price which you want to bid.

5) Click on ‘Submit’ IPO application form.

6) Visit the UPI App (net banking or BHIM) to approve the mandate.

Elin Electronics IPO Important Dates

Here are the important dates about Subscription, Allotment and Listing.

Offer Open 20-Dec-22
Offer close 22-Dec-22
Finalization of Allotment 27-Dec-22
Initiation of Refunds 28-Dec-22
Credit to Demat Account 29-Dec-22
IPO Shares Listing Date 30-Dec-22

Frequently Asked Questions (FAQs)

What is Elin Electronics IPO date?

This IPO would open on 20th December, 2022 and closes on 22nd December, 2022.

What is Elin Electronics Share Price?

The IPO share price band is Rs 234 to Rs 247 per share.

What is Elin Electronics IPO Rating?

Company do not require to get an IPO rating as this issue is for equity shares. Currently, Elin Electronics short term rating and long term rating is not available.

How much portion allocated to each group of investors in this IPO?

1) QIB - Not less than 50% of the offered shares 2) NII / HNI - Not less than 15% of the offered shares 3) Retail - Not less than 10% of the offered shares

What is Elin Electronics IPO GMP today?

GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market. There is no major trading’s happening in offline market, hence Elin Electronics GMP is not available.

Elin Electronics Share Price Valuation

Elin Electronics IPO price band is Rs 234 to 247 per share. If we consider FY2022 EPS of Rs 9.59, the P/E ratio works out to be 26x. If we consider last 3 years weighted EPS of Rs 8.76, the P/E ratio works out to be 28x. If we annualise 6 months ended Sep-22 EPS, P/E ratio works out to be 24x. Means company is asking for the issue price in P/E of 24x to 28x. There are listed peers like Dixon Technologies trading at P/E of 140x (Highest) and Amber Enterprises trading at P/E 62x (Lowest) and industry average P/E is 101x. Hence the Elin Electronics IPO price is attractively priced.

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Elin Electronics IPO Review – Is it good or bad for investment?

After going through all these points, you might be wondering whether Elin Electronics IPO is good or bad for investment?

Elin Electronics Limited is a leading electronics manufacturing services (EMS) provider in India. Company generated strong revenue growth in the last few years. Company has generated stable margins in the last 3 years. The issue price is attractively priced.

On the other side, beyond other risk factors indicated above, the company depends on a limited number of customers. Any loss of such customers can impact company business.

Considering both positive and negative factors, one can invest in this IPO for a medium to long term.

Disclaimer: This article is for educational purpose only. Investing in IPO is high risk and one can lose their capital. Please consult financial advisor before investing in such high-risk investment option.

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Suresh KP

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