The Indian IPO market is abuzz once again after a lull in the first half of 2023. The past few weeks saw many IPOs coming out giving investors an opportunity to tap onto various sectoral investment opportunities. The latest IPO offering that investors can look forward to is from the Electronic Manufacturing Systems industry. Cyient DLM Limited, a company engaged in providing Electronic Manufacturing Services and solutions, is coming out with its IPO on 27th June 2023.
Cyient DLM Limited IPO will open for subscription on 27th June 2023 and will close on 30th June 2023.
Here are all the important details of Cyient DLM Limited, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.
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The key details of Cyient DLM Limited are as under.
- IPO Size
The size of the IPO and different categories of the issue are:
|IPO Opening Date||29th June 2023|
|IPO Closing Date||30th June 2023|
|Issue Type||Book Built Issue IPO|
|Face Value of shares||Re. 10 per share|
|IPO Price Band||Rs. 250 – Rs. 265 per share|
|IPO Size||Rs. 592 crores|
|Offer for Sale||The IPO is entirely a fresh issue|
|Fresh Issue||Rs. 592 crores|
- IPO Dates
The important dates for Cyient DLM Limited IPO are highlighted below:
|Opening date||29th June 2023|
|Closing Date||30th June 2023|
|Allotment date||5th July 2023|
|Refund Date||6th July 2023|
|Share Credit Date||7th July 2023|
|Listing Date||10th July 2023|
- IPO Lot Sizes
Investors can subscribe to Cyient DLM Limited shares in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:
|Investments in lots||Minimum – 1 lot|
Maximum – 13 lots
|Investment amount||Minimum – Rs. 14,000 – 14,840|
Maximum – Rs. 1,92,920
|Shares||Minimum – 56|
Maximum – 728
- IPO Reservation
Here’s the summary of reservation for different applicant categories in this IPO:
|Category of Investor||Reservation Percentage|
|Retail Individual Investors||10%|
|QIB (Qualified Institutional Buyers)||75%|
|NII (Non-Institutional Bidders)||15%|
Cyient DLM Limited IPO Objectives
This IPO will be only a fresh issue. The proceeds from the issue will be utilised in the following manner.
- Meeting incremental working capital needs of the company as well as its capital expenditure.
- The proceeds will also be used for repayment/prepayment of existing borrowings of the company and achieving inorganic growth through acquisitions.
- The company aims to use any balance proceeds for general corporate purposes.
Top things to know about Cyient DLM Limited IPO
Cyient DLM Limited was incorporated in 1993 and is in the business of providing Electronic Manufacturing Services (EMS) and solutions. The business meets its clients’ needs in the form of Build to Print (“B2P”) and Build to Specification (“B2S”) services where they either deliver solutions based on the design provided by their clients or provide complete designing, manufacturing, and execution of the product based on the client specifications respectively.
The company’s client base includes some of the world’s most well-known and respected companies like Honeywell International Inc. (“Honeywell”), Thales Global Services S.A.S (“Thales”), ABB Inc, Bharat Electronics Limited, and Molbio 152 Diagnostics Private Limited and many more.
The primary solutions offered by the company include
- Printed circuit board (“PCB”) assembly (“PCBA”),
- Cable harnesses, and
- Box builds which are used in safety-critical systems such as cockpits, inflight systems, landing systems, and medical diagnostic equipment.
Financials of the company
Cyient DLM Limited’s financials are given in the table below:
|Year||Total Assets (Rs. in cr)||Operating Revenue (Rs. in cr)||Profit after tax (Rs. in cr)||Basic EPS||Return on Net Worth|
Strengths of the company
Some of the key strengths of Cyient DLM Limited that investors can take note of are:
|Business model||The company has long-standing merits like a manufacturing infrastructure, stringent quality, diverse in-house capabilities, and a strong supply chain which helps them in providing high-quality end-to-end integrated solutions to their customers.Cyient DLM also has a robust customer book with marquee customers The company is in a high entry-barrier industry limiting competitionTheir engineering solutions are tailored to the specific needs of each client, and they can be implemented across the entire value chain.|
|Qualitative merits||Cyient DLM has the backing of the parent promoter Cyient Limited which is a well-known name in the industry and the support of an experienced Board and Management. The company is also setting up a new manufacturing facility which will aid in widening the product portfolio and increasing production capacity|
Risks of investment
Here are some of the risks that investors of Cyient DLM Limited IPO should know:
|Business viability and profitability||The company is dependent on its few customers for a major portion of its revenues which can be detrimental to its future.Cyient DLM also uses third-party transportation for raw material supply and finished goods delivery and any breakdown in this segment can lead to significant losses. The company is highly dependent on its Key personnel like promoters, management team, and others for its performance and any loss in this regard can adversely affect the business.|
|Other concerns||Cyient Limited operates in fragmented business segments and can potentially face huge competition from small and large players.There can be a possibility of conflict of interest in case the promoters or directors enter into competing contracts that can have an adverse impact on the businessA downgrade in the credit rating could make it more difficult and expensive to raise capital in the future.|
What is the Grey Market Premium (GMP) of Cyient DLM Limited?
As of June 24th, 2023, the grey market premium for the shares of Cyient DLM Technology Limited IPO is Rs. 110 as per market observers. This means the shares are expected to list at a premium of Rs 110 per share over the listing cap price of Rs 265.
Should you apply for Cyient DLM Limited?
Cyient Limited is a very big technology company focused on engineering and Cyient DLM is from the same promoter group. It has created a buzz in the grey market and thus presents an opportunity for potential listing gains. The company has also had strong financial performance over the past years and a consistent increase in its operating revenues and assets. However, the company is dependent on a few customers to get a major chunk of their revenues and also the industry in which it operates is quite fragmented and can face huge competition.
It is important that investors conduct their own due diligence and evaluate the company’s financials, risks, and industry dynamics before making any investment decisions.
How to apply for Cyient DLM Limited?
Investors can invest in this IPO through the Fisdom app.
Cyient DLM Limited IPO FAQs
The eligible investors in Cyient DLM Limited are QIB (75%), NII (15%), and RII (10%).
The EMS industry in India grew at a CAGR of approximately 45% between 2016-2022 and is expected to be around US$215 billion by 2025-26.
The employee discount offered on the Cyient DLM IPO is Rs. 15 per share.
The lot size in the Cyient DLM IPO is 56 shares per lot.