Avalon Technologies is entering the capital markets on Monday, 3 April, with an initial public offer (IPO) of equity shares in the price band Rs 415-336, aggregating to Rs 865 crore. The IPO consists of fresh equity shares of face value Rs 2 aggregating to Rs 320 crore and an offer-for-sale from existing shareholders, aggregating to Rs 545 crore. The 25 year old Chennai headquartered company plans to use the proceeds from the fresh issue portion of the IPO to retire its debt, which currently stands at Rs 300 crore.
Avalon manufactures a range of electronic hardware for the clean energy, transportation, communication, medical and industrial sectors. Addressing a news conference in Ahmedabad on Wednesday, Chairman & Managing Director Kunhamed Bicha said that 80% of Avalon’s manufacturing is in India and 20% is in the USA. “We do the labour-intensive manufacturing in India and the automated manufacturing and final assembly in the USA,” he said.
Avalon operates in the B2B (Business to Business) market and its products include printed circuit boards, signaling and braking systems for the railways,solar inverters, cables & wireless harnesses and sheet metal products for the aerospace industry. 62% of its sales come from outside India and 38% comes from within India.
The company registered Rs 840 crore revenues in FY22 and Rs 585 crore in the first eight months of FY23. PAT margin was 8% in FY22 and 5.7% in 8MFY23. Addressing the news conference, group CFO Subramanian RM said that the company’s return on capital employed stood at 27% in FY22, which is the best in the industry. “Our current capacity utilisation is 65%, which means we have ample scope to increase production as orders come in,” he said.
Photo: (L to R) Avalon Technologies President Bhaskar Srinivasan. CMD Kunhamed Bicha, CFO Subramanian RM.
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