Elin Electronics get Sebi nod to launch IPO; company to raise Rs 760 crore via issue

Capital market regulator Securities and Exchange Board of India (SEBI) has approved Initial Public Offering (IPO) of Elin Electronics Limited (EEL). The electronics manufacturer is planning to raise Rs 760 crore through this public issue.

Delhi-based company's IPO offers equity shares with a face value of Rs 5 each, comprising a fresh issue of up to Rs 175 crore and an offer for sale of up to Rs 585 crore.

An update with Sebi revealed on February 28, 2022, that Elin Electronics, which filed preliminary IPO papers with SEBI in November 2021, received its observation letter on February 28, 2022.

Existing shareholders will sell shares worth Rs 345.60 crore, while promoters will sell shares worth Rs 239.4 crore as part of the Offer for Sale.

Approximately Rs 80 crore from the fresh issue will be utilised to pay off existing debt, Rs 48.97 crore for improving and expanding existing plants in Ghaziabad, Uttar Pradesh, and Verna, Goa, along with general corporate purposes.

With Kamal Sethia, Chairman and Managing Director, and Raj Karan Chhajer, the company's CEO, Elin provides Electronic Manufacturing Services (EMS), Universal Motors and Induction Motors, Tool and Die Designing, Domestic Kitchen Appliances, Personal Care Products, Lighting Products & Automotive Components, all of which have risky business models.

The company has Axis Capital and JM Financial as the lead managers to the issue.

The firm is a leading electronics manufacturing services (EMS) provider of end-to-end product solutions for major brands of lighting, fans, and small/ kitchen appliances in India and is one of the largest fractional horsepower motors manufacturers in India.

As per the F&S report stated in its DRHP, EEL caters to both OEM and ODM business models and holds a market share of approximately 7% and 10.7% in FY21, respectively, in LED lighting & Flashlights and Small Appliances. For LED lighting, fans, and switches, the organisation has partnerships with leading consumer electronics and appliance brands such as Signify Innovations and Eveready; for small appliances, Philips, Bosch, Faber, Panasonic, Preethi (owned by Philips), Groupe SEB (Maharaja brand), and Usha; as well as Medical diagnostic cartridges, and for sheet metal parts and components.

Its revenues from operations in FY21 were Rs 862.38 crore as opposed to Rs 785.58 crore in FY20. Its net profit stood at Rs 34.86 crore for the said period as compared to Rs 27.49 crore in the previous financial year.