Elin Electronics Limited (EEL), a leading electronics manufacturing services company, has received capital markets regulator SEBI's go ahead to raise Rs 760 crore through an initial public offering.
The Delhi-based company's IPO comprises equity shares of face value of Rs 5 each comprising a fresh issue aggregating up to Rs 175 crore, and an offer for sale of up to Rs 585 crore.
Elin Electronics, which had filed preliminary IPO papers with SEBI in November 2021, obtained its observation letter on February 28, 2022, an update with Sebi showed on Monday.
As a part of the Offer for Sale, existing shareholders will sell shares to the tune of Rs 345.60 crore and promoters will sell shares worth Rs 239.4 crore.
Proceeds from the fresh issue will be used to the extent of Rs 80 crore to repay/prepay debt, Rs 48.97 crore for funding capital expenditure for upgrading and expansion of existing plants in Ghaziabad, Uttar Pradesh and Verna, Goa besides general corporate purposes.
Led by Kamal Sethia, Managing Director & Promoter along with Raj Karan Chhajer, its CEO, Elin offers Electronic Manufacturing Services (EMS), Universal Motors and Induction Motors, Design & Manufacturing of Tools/Moulds/Dies, Domestic Kitchen Appliances, Personal Care Products, Lighting Products & Automotive Components, resulting in a de risked business model.
The company stands different from the traditional EMS companies given its backward integrated product and solutions suite. Its focus is on component fabrication, sourcing and system assembly. Its key products in its EMS business vertical include LED lighting, fans and switches; small appliances; fractional horsepower and other EMS products.
EEL caters to both original equipment manufacturer ("OEM") and original design manufacturer ("ODM") business models and as per the F&S report stated in its DRHP, is one of the key players for LED lighting & Flashlights and Small Appliances with a market share of approximately 7% and 10.7% in FY21, respectively. The company partners with leading consumer electronics and appliances brands for LED lighting, fans and switches such as Signify Innovations and Eveready; for Small appliances such as Philips, Bosch, Faber, Panasonic and Usha; for fractional horsepower motors such as Havells, Bosch, Faber, Panasonic, Preethi (owned by Philips), Groupe SEB (Maharaja brand) and Usha; as well as for Medical diagnostic cartridges and for Moulded and sheet metal parts and components makers.
For FY21, it's revenues from operations stood at Rs 862.38 crore as against Rs 785.58 crore in the preceding fiscal. Its net profit stood at Rs 34.86 crore for the said period as compared to Rs 27.49 crore in the previous financial year.
Axis Capital Limited, and JM Financial Limited are the book running lead managers to the issue.