Cyient DLM IPO: Design and electronic manufacturing firm Cyient DLM’s Rs 592-crore IPO opens for subscription today, 27 June. The public offer is entirely a fresh issue of shares. Cyient DLM promoter Cyient Ltd will hold a 66.68% stake in the firm. Cyient DLM has set the price band for the IPO at Rs 250-265 per equity share. Cyient DLM shares’ grey market premium soared 37% on Tuesday, commanding a premium of Rs 98 over upper end of the IPO price, implying a listing price of Rs 363 per share.
Ahead of the issue opening, Cyient DLM raised Rs 259.64 crore from 20 anchor investors ahead of IPO on 26 June. The IPO will close for subscription on 30 June. The date of allotment of units is projected to be 5 July, following which, the issue is expected to list on the bourses on 10 July.
Should you apply for the Cyient DLM IPO?
Choice Broking: Subscribe
“The domestic EMS sector is witnessing strong tailwinds. CDLM is not an ordinary EMS company. It provides complex EMS services to highly regulated sectors, which has stringent quality and qualification requirements. Over the period, CDLM has developed expertise, which acts as an entry barrier for a new competitor. Order book is healthy and is largely from key clients, which demonstrates the client’s stickiness. At a higher price band, CDLM is demanding a P/E multiple of 66.2x (to its FY23 earning), which is at premium to the peer average. However, considering the robust order book, strong parentage and benefits of lower finance costs in the near-to-medium term, we feel the demanded valuation is attractive. Thus we assign a “Subscribe” rating for the issue.”
Geojit Financial Services: Subscribe
“At the upper price band of Rs 265, CDL is available at P/E of 66.2x (FY23), aligning with industry peers’ valuations. The electronics industry in India is poised for growth, supported by government initiatives like Make in India, the Production Linked Incentive (PLI) Scheme, and the China + 1 Strategy adopted by OEMs. CDL has a bright future ahead considering its robust order book, reduced debt post IPO and strong promoter backing augurs well for the company. We assign a “Subscribe” rating for the issue on a short to medium term basis..”
Reliance Securities: Subscribe
“On FY23 annualized financials, the IPO is valued at 66.2x P/E, 25.6x EV/EBITDA and 2.7x EV/ Sales, at the upper price band. The EMS market globally is witnessing a strong growth trajectory. India’s EMS market contributes 2.2% ($20bn) of the global EMS market in 2022 and it is the fastest growing among all countries at a CAGR of 32.3%. It is expected to contribute 7% ($80bn) of the global EMS market in 2026 which will aid the company to grow further. Considering the strong business prospects, healthy financials, diversified product mix, tailwinds on the back of solutions-oriented approach, client-focused service and track record of reliability, we recommend SUBSCRIBE to the issue.”