Cyient DLM operates as an integrated electronic manufacturing service (EMS) and solutions provider, catering to the complete life cycle of products, including design, build, and maintenance. The company boasts enduring relationships with prestigious clients such as Honeywell, Thales Global Services, ABB, Bharat Electronics
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The public offering of Cyient DLM has commenced, inviting subscriptions until June 30. The IPO, consisting solely of fresh equity shares, carries a price band of Rs 250-265, amounting to a total of Rs 592 crore. Market analysts are overwhelmingly recommending investors subscribe due to the company’s attractive valuations and promising growth potential.
At the upper band of Rs 265, the IPO seeks a market capitalization of Rs 2,102 crore based on FY23 earnings, resulting in a P/E ratio of 66x. This valuation can be compared to listed peers such as Syrma SGS Technology, Kaynes Technology, DCX Systems, and Avalon Technologies, which trade within the range of 35x to 95x.
Prashant Tapse of Mehta Equities expressed his recommendation to subscribe to the IPO for the long term, citing the considerable attention it has garnered due to the backing of the promoter’s parentage and the company’s industrial and growth prospects.
Considering the improved market sentiments, analysts advise allocated investors to secure partial profits if the listing gains exceed 25%.
Cyient DLM operates as an integrated electronic manufacturing service (EMS) and solutions provider, catering to the complete life cycle of products, including design, build, and maintenance. The company boasts enduring relationships with prestigious clients such as Honeywell, Thales Global Services, ABB, Bharat Electronics, and Molbio Diagnostics, with an average association spanning over 11 years.
Canara Bank Securities highlighted the company’s ability to serve across the value chain, enhancing its future diversification prospects. The brokerage recommends subscribing to the IPO for listing gains and long-term investment, noting the company’s appealing valuation based on FY23 figures. Other analysts from Choice, Stoxbox, Swastika, and Reliance Securities have also assigned a subscribe rating to the IPO.
Reliance Securities emphasized the strong business prospects, healthy financials, diverse product mix, solutions-oriented approach, client-centric service, and track record of reliability, ultimately recommending investors to subscribe to the issue.
For the fiscal year ending March 2023, Cyient DLM witnessed a 15% growth in revenue from operations, amounting to Rs 832 crore, while the profit for the same period increased by 4% to Rs 31.7 crore. The net proceeds from the IPO will be allocated towards additional working capital requirements, capital expenditure, debt repayment, and general corporate purposes.
Axis Capital and JM Financial are the book-running lead managers for the IPO, while KFin Technologies will serve as the registrar.
