Cyient DLM Restricted IPO Particulars:
Estimated Market Cap: 2,000 Cr
IPO Date: twenty seventh June to thirtieth June
Whole shares: 2.23 Cr
Value band: ₹ 250- ₹ 265 per share
IPO Concern Measurement: ~ ₹ 592 Cr
Lot Measurement: 56 shares and multiples thereof
Goal of IPO: Recent Concern for reimbursement of debt & working capital necessities.
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About Cyient DLM Restricted:
Cyient DLM is a number one built-in EMS (Digital Manufacturing Providers) and options supplier with a robust deal with all the life cycle of a product, together with design, construct, and keep. With over 20 years of expertise, the corporate is a certified provider to world OEMs within the aerospace and defence, medical know-how, and industrial sectors. It is likely one of the few EMS firms in India catering to extremely regulated industries and the most important provider of EMS providers to the aerospace and defence trade by worth in India.
The corporate has derived vital benefits and a robust aggressive edge from the sector experience of its Promoter Cyient Ltd. which was named within the ‘Management zone’ by the Info Providers Group throughout aerospace, telecommunication, semiconductors, industrial, and medical gadgets verticals.
Cyient DLM is led by a diversified Board with a mean of over seven years within the EMS trade, which is supplemented by its skilled administration group with a mean of over 20 years of trade expertise. The management group is supported by a workforce of 634 full-time staff and 387 contract employees and an NPI and engineering group of 68 individuals and an enhanced in-house high quality management system group, along with Cyient Restricted’s design group.
Concerning the trade
The India EMS is a sizeable trade, contributing to 2.2% (USD 20 billion) of the worldwide EMS market in CY2022. India’s EMS trade is the quickest rising amongst all nations at a CAGR of 32.3% and is predicted to contribute 7.0% (USD 80 billion) of the worldwide EMS market in CY2026. The growth of India’s EMS trade is being fuelled by a wide range of elements. Important causes driving the expansion are elevating labour prices in different elements of the world and a pattern amongst massive OEMs to outsource manufacturing fairly than spend money on their very own infrastructure
Portfolio of the corporate and Income breakup
The Firm’s options primarily comprise: (i) printed circuit board (“PCB”) meeting (“PCBA”), (ii) cable harnesses, and (iii) field builds that are utilized in safety-critical methods comparable to cockpits, inflight methods, touchdown methods, and medical diagnostic gear.
It offers providers throughout the product life cycle for shoppers by performing as an built-in service supplier who can assist their manufacturing and after-market providers wants, in addition to their design wants by leveraging the Promoter’s design group. As a strategic companion to shoppers throughout extremely regulated industries, firm enjoys long-term relationships with excessive buyer stickiness and a excessive proportion of repeat enterprise, which permits it to have robust visibility on future income and a secure shopper base.
Monetary:
Cyient DLM Ltd has proven constant income progress through the years. The corporate’s income has grown at a CAGR of 16% during the last 5 years. The Firm turned worthwhile within the 12 months 2021. The gross margins have been unstable starting from 3% to 12%. Curiosity is a significant factor of its price at the moment, nevertheless this shall scale back considerably publish the problem. Administration is eager on turning into internet debt-free apart from the promoter entity debt of about 200 Cr, this shall support its internet margins going ahead.
Key Monetary Ratios and Tendencies:
Administration:
Rajendra Velagapudi is the Managing Director of the Firm. He holds a bachelor’s diploma in know-how from School of Engineering, Nagarjuna College, a grasp’s diploma of engineering in vehicle engineering from Anna College, Madras and diploma of Grasp of science in design of rotating mechanics from College of Mechanical Engineering, Cranfield College. Previous to becoming a member of the Firm, he labored with Ford Truck Manufacturing Division, Simpsons Co. Ltd., Bajaj Tempo Restricted and Bharat Earth Movers Restricted.
Ganesh Venkat Krishna Bodanapu is the Chairman, Non-Govt & Non-Unbiased Director of the Firm. He holds a bachelor’s diploma of science in electrical engineering from Purdue College and a grasp’s diploma in enterprise administration from the J.L Kellogg College of Administration, Northwestern College. He has been related to the Promoter Firm (Cyient Ltd.) since 2003 and at the moment is the managing director and chief govt officer of the Promoter entity.
Competitors:
The Indian EMS market includes numerous tiers of firms together with world EMS firms with operations in India and huge and mid/small Indian EMS firms. Firm faces competitors from Indian EMS suppliers comparable to SFO Applied sciences Non-public Ltd, Bharat FIH Ltd, Avalon Applied sciences Ltd, Syrma SGS Know-how Ltd and Elin Electronics Ltd, and worldwide gamers comparable to Hon Hai Precision Business Co. Ltd. (Foxconn), Pegatron Corp, Quanta Pc, Inc., Plexus Corp., Flex Ltd., Compal Electronics, Inc., Wistron Corp, Jabil, Inc
Positives:
- The corporate has the flexibility to supply built-in engineering options with robust capabilities throughout the product worth chain.
- The Business has excessive entry obstacles for rivals as a result of required technical experience & capabilities in safety-critical electronics in extremely regulated industries.
- Firm has sturdy and trade main order e book with marquee prospects, with whom they take pleasure in sustained and long-standing relationships as their most popular companions.
Dangers:
- Cyient DLM’s enterprise relies on the sale of its merchandise to sure key prospects. The lack of any of the important thing prospects may have a fabric hostile impact on its enterprise. Firm relies on sure of its key prospects, particularly Honeywell Worldwide Inc., Thales World Providers S.A.S, ABB Inc., Bharat Electronics Restricted and Molbio Diagnostics Non-public Restricted.
- Firm will depend on third occasion suppliers for uncooked supplies and elements, that are on a purchase order order foundation. Such suppliers could not be capable of carry out their situations in a well timed method, or in any respect and any delay, scarcity, interruption, discount within the provide of or volatility within the costs of uncooked supplies on which firm rely could have a fabric hostile impact on its enterprise.
- There could also be issues with the merchandise firm designs by means of the design group of the Promoter, manufacture or service that would lead to legal responsibility claims towards the corporate, diminished demand for its providers and injury to its repute.
Valuation:
Based mostly on the worth band, the corporate is being listed at Rs 2,000 crore on the higher finish of the worth band. This means an EV/EBITDA ratio of round 23x primarily based on TTM earnings.
Relative valuation of the Indian Listed Rivals is as follows:
MoneyWorks4Me Opinion:
The corporate has created a distinct segment place for itself within the EMS and solutions-providing phase. The manufacturing sector of India has the potential to develop multifolds within the coming interval. India has began to look as a lovely hub for overseas investments within the manufacturing sector identical to it already was for the Providers sector. A number of manufacturers have arrange or wish to set up their manufacturing bases within the nation. The price of manufacturing in India is the sting that’s going to remain, the important thing right here is how briskly can Indian gamers enhance their technological capabilities in order to have the ability to compete with the worldwide gamers.
At current 65-70% of Cyient DLM’s income is exports, going ahead when some a part of the manufacturing assemblies for Aerospace, Electronics, Semiconductors come to India, Cyient DLM is usually a dependable & succesful companion to cater to their EMS wants thus rising the share of home income as properly. With at the moment simply 2% of the worldwide EMS market, the chance this trade offers is large. Cyient DLM is a good play on this EMS theme.
Suggestion: Buyers ought to Apply
Cyient DLM is predicted to do properly over the following few years because it wins extra shoppers & orders. As per our evaluation the IPO seems to be pretty priced, we might advocate retail traders to use for the problem.
Essential factors to contemplate:
- IPOs in a preferred sector typically will get oversubscribed and retail investor is lucky if he receives even 1 odd lot (Rs 15,000) in IPO allotment. Since this funding quantity is small for our common investor, we advocate SUBSCRIBE in good firms with favorable prospects over the medium time period.
- Nevertheless, don’t take into account massive investments in IPO shares post-listing as they get listed at even greater valuation; moreover, they might overpromise for IPO success however under-deliver in actuality.
- Conservative traders who want to personal a portfolio of Core firms should keep away from investing in costly or mid-small cap IPO.
Notice: We don’t advocate shopping for simply because the IPO market is scorching. We don’t earn any fee or price for selling IPOs so anticipate an sincere overview from us on a enterprise mannequin and valuation.
| IPO Exercise | Date |
| IPO Open Date | June 27, 2023 |
| IPO Shut Date | June 30, 2023 |
| Foundation of Allotment Date | July 05, 2023 |
| Refunds Initiation | July 06, 2023 |
| A credit score of Shares to Demat Account | July 07, 2023 |
| IPO Itemizing Date | July 10, 2023 |
| Software | Tons | Shares | Quantity |
|---|---|---|---|
| Minimal | 1 | 56 | ₹ 14,840 |
| Most | 13 | 728 | ₹ 192,920 |
Cyient DLM Ltd IPO – Apply or Keep away from?
Cyient DLM Ltd is predicted to do properly over the following few years because it wins extra shoppers & orders. As per our evaluation, the IPO seems to be pretty priced we might advocate retail traders to use for the problem.
When will the Cyient DLM Ltd IPO open?
Cyient DLM Ltd IPO will open for subscription on Tuesday, 27th June 2023, and closes on Friday 30th June 2023.
What’s the worth band of Cyient DLM Ltd IPO?
The worth band for Cyient DLM IPO is Rs. 250-265/share.
What’s the lot measurement for Cyient DLM Ltd IPO?
Retail traders can subscribe to the IPO minimal lot measurement is 56 shares, as much as a most of 13 heaps i.e. Rs. 1,92,920/-.
What’s the concern measurement of Cyient DLM Ltd IPO?
The full concern measurement is ~ Rs. 740 Cr.
What’s the quota reserved for retail traders in Cyient DLM Ltd IPO?
The quota for retail traders in Cyient DLM Ltd IPO is mounted at 10% of the online provide.
When will the idea of allotment be out?
Allotment shall be finalized on July 5th and refunds shall be initiated by July 6th. Shares allotment shall be credited in Demat accounts by July 7th.
What’s the itemizing date of Cyient DLM Ltd’s IPO?
The tentative itemizing date of Cyient DLM Ltd’s IPO is July 10th 2023.
The place may we examine the Cyient DLM Ltd IPO allotment?
One can examine the subscription standing on KFintech Pvt Ltd.
What does Cyient DLM Ltd do?
Cyient DLM Ltd. is an built-in EMS and options supplier with a deal with all the life cycle of a product, together with design, construct, and keep. Its options primarily comprise the manufacture of (i) printed circuit board meeting (PCBA), (ii) cable harnesses, and (iii) field builds that are utilized in safety-critical methods comparable to cockpits, inflight methods, touchdown methods, and medical diagnostic gear, which CDL offers to shoppers as B2P or B2S providers.
Who’re the friends of Cyient DLM Ltd?
Listed firm friends for Cyient DLM are Syrma SGS Know-how Ltd, Kaynes Know-how India Ltd & DCX Techniques Ltd.
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