Avalon Technologies IPO Review. In a time of funding winters and bleak growth, some companies have risen to the challenge of going public despite skeptical market sentiment. We’re going to cover the upcoming initial public offering of Avalon Technologies Limited. The IPO will open for subscription on April 3, 2023 and close on April 4, 2023. It seeks to raise up to ₹865 crore.
In this article, we will look at Avalon Technologies IPO Review 2023 and analyze its strengths and weaknesses. Keep reading to find out!
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About the company
Avalon Technologies was founded in 1999, making it 24 years old. It began when the founders were assembling circuit boards in California in 1995. Today they have become an international manufacturer with over 1,900 employees. They are an end-to-end electronics manufacturing service provider.
Some of the companies they count as clients are Collins Aerospace, E-Infochips, The US Malabar Company, Meigit, Kyosan India and Zoner Systems.
They have 12 manufacturing plants in two major countries – India and the United States. The promoters of the company are Kunhamed Bicha and Bhaskar Srinivasan. They got approval from SEBI for the IPO in the month of January this year.
As per the company’s DRHP, they are one of the leading fully integrated manufacturers in India having an end-to-end operation to deliver box build solutions. They provide full support to their customers from PCB (Printed Circuit Board) design to box build of electronic systems. Other services provided by the company include cable assembly, machining, magnetics, injection molded plastic and sheet metal fabrication.
Avalon is an ISO-certified company with presence in key industries such as aerospace & defence, power, railways, telecom, clean energy etc.
Financial Highlights
If we look at the financial position of Avalon Technologies Limited then we come to know that their assets have grown from Rs. 449.65 crores in March 2020. 587.96 crores in March 2022. Their revenue also follows a similar trend, it has increased from Rs. 653.15 crores in March 2020. 851.65 crores in March 2022.
As of November 2022, the company’s revenue for FY 22-23 stood at Rs 596.75 crore. His profits have increased from Rs. 12.33 crores in March 2020. 68.16 crores in March 2022. By November 2022, the company’s profit for FY 22-23 is Rs 34.18 crore. It is also important to note that the borrowings of the company have increased from Rs. 248.48 crores in March 2020. 294.05 crores on 22 March.
Revenue Breakup of Avalon Technologies Limited
(Source: RHP of the company)
Balance Sheet Of The Company
Profit and loss Statement of the company
Avalon Technologies IPO Review – Competitors
The following are the company’s competitors in India:
Dixon Technologies (India) Limited, Allin Electronics Limited, Amber Enterprises India Limited, Sira SGS Technology Limited, Kynes Technology India Limited, VVDN Technologies Private Limited, Bharat FIH Limited and SFO Technologies Private Limited
Strength
• The company offers an integrated and well-diversified solution suite that includes PCB design and assembly, and manufacturing of various components which allows them to offer PCB design and analysis for new product development. It is one of the few EMS companies in India that provides one-stop services from PCB design and analysis to new product development and subsequent volume production.
• The company has created an entry barrier for any new entrants in the industry through its experience of offering EMS services across product and industry verticals to clients globally over the years.
• Over the years the company has diversified and expanded its customer base and evolved its operations to cater to various end use industries across multiple product capabilities
• The company aims to become a significant player in the EMS industry hinges on its performance and ability to build long-term relationships with its customers.
• The company has established a global distribution footprint with quality standards and advanced manufacturing and assembly capabilities. As of November 30, 2022, the company operates through 12 manufacturing units spread across California and Georgia in the US and Karnataka and Tamil Nadu in India.
weaknesses
• The Company obtains its raw materials primarily from suppliers on a purchase-order basis. Any non-compliance by suppliers in meeting contractual obligations, increase in raw material costs or any disruption in the supply chain will have an adverse impact on business operations.
• A major portion of the company’s revenue is earned from a few key customers. Losing a relationship with any of these customers can have a huge impact on the profitability of the business.
• The Company’s business is spread across other countries and as a result, foreign exchange fluctuations will impact its earnings and profitability.
• Failure to timely obtain or renew certain recognition, licenses and permits from government and regulatory authorities may affect the operations of the business.
• The company is required to adhere to strict quality requirements and delivery schedules for its products at predetermined prices. Failure to do so will have an impact on the reputation of the company which in turn may affect its financial position.