Cyient DLM IPO hits Street; here's what Anil Singhvi recommends
Cyient DLM IPO: The subscription window for the initial share sale of Cyient DLM will be open for three trading days, till June 30. Should you subscribe?
IT company Cyient's subsidiary, Cyient DLM, is all set to launch an IPO worth Rs 592 crore on Tuesday, June 27. The subscription window for the initial share sale will be open for three trading days, till June 30. The Cyient DLM IPO comprises fresh issuance of shares.
Zee Business Managing Editor Anil Singhvi recommends applying for the IPO for listing gains and from a long-term perspective.
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Cyient DLM का IPO - आज से 30 जून तक खुला रहेगा
- प्राइस बैंड : ₹ 250-265/शेयर
- लॉट साइज: 56 शेयर
— Anil Singhvi Zee Business (@AnilSinghvi_) June 27, 2023
Key things to know about Cyient DLM IPO
Potential investors will be able to bid for the IPO, within the subscription window, in a price range of Rs 250–265 apiece.
Bidding will be available in multiples of 56 shares, translating to Rs 14,000-14,840 per lot.
The company plans to utilise the proceeds from the issue for:
-funding incremental capital requirements
-achieving inorganic growth through acquisitions
-general corporate purposes
The bidding process will start on June 27 and end on June 30. The finalisation of allotment is likely on July 5, and listing on bourses NSE and BSE on July 10.
Here's how analysts view the Cyient DLM IPO:
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Here are some of the strengths and concerns about the Cyient DLM IPO, as listed by HDFC Securities:
-It is well-positioned to deliver solutions to its customers across the entire product lifecycle
-Its engineers have significant expertise which helps it build and supply complex products to its customers on time
Robust and industry-leading order book with marquee customers.
Manufacturing infrastructure, stringent quality, diverse in-house capabilities, and robust supply chain, enable in providing high-quality end-to-end integrated solutions to the customers
Cyient DLM has derived significant advantages and a competitive edge from the sectoral expertise of its promoters
-As of March 31, 2022, the company's market share in the Indian Electronic Manufacturing Services (EMS) market was 0.5 per cent. Any failure to compete effectively in the highly competitive EMS industry could have a material adverse effect on its business, results of operations, financial condition, and cash flows.
A significant portion of revenue from operations is derived from business-to-person (B2P) solutions, and the manufacture and sale of printed circuit board assembly (PCBAs), so any decrease in the sales of PCBAs or the volume of B2P orders will adversely affect the business, results of operations, financial condition, and cash flows.
The company is highly dependent on its Mysuru facility for a significant portion of its revenue from operations and its manufacturing facilities are geographically concentrated. Any disruption in any of its manufacturing facilities may adversely affect the business, results of operations, financial condition, and cash flows.
The global nature of its operations exposes it to numerous risks that could materially adversely affect the business results of operations, financial condition, and cash flows. Further, foreign exchange fluctuations may adversely affect its earnings and profitability.
There may be problems with the products CDL designs through the design team of its Promoter, manufacturer, or service that could result in liability claims against it, reduced demand for its services, and damage to its reputation.
Changing laws, rules, and regulations and legal uncertainties in India, including the adverse application of tax laws and regulations, may adversely affect the business, results of operations, financial condition, and cash flows.