Avalon Technologies: Remarkable 58% returns from flat listing

Business Overview 

Avalon Technologies Limited is an Indian company that specializes in electronic manufacturing services (EMS). They offer a comprehensive range of services, from printed circuit board (PCB) design and assembly to complete box-build solutions. Their customer base consists of global original equipment manufacturers (OEMs) located in countries such as the United States, China, Netherlands, and Japan. 

The company’s capabilities include PCB design and assembly, cable assembly and wire harnesses, sheet metal fabrication and machining, magnetics, injection moulded plastics, and end-to-end box build of electronic systems. This means that they can handle various aspects of the manufacturing process, including designing the PCB layout, assembling the components onto the boards, and integrating them into complete electronic systems. 

Additionally, the company is experienced in providing design support for critical integrated assemblies, sub-assemblies, components, and enclosures across multiple industry verticals. 

This indicates that they have the expertise to manufacture and support complex and specialized electronic assemblies for industries such as automotive, telecommunications, consumer electronics, industrial equipment, and more. 

IPO History and Subscription details 

Let’s recapitulate the subscription history of Avalon Technologies Limited, on the closing day of the IPO window, April 6, 2023, the company experienced a subscription rate of 2.34 times. The IPO received a response in the following manner, where the retail category subscribed at a rate of 0.88 times. The Qualified Institutional Buyers (QIB) category achieved an impressive subscription rate of 3.77 times, while the Non-Institutional Investors (NII) category reached a subscription rate of 0.43 times. 

The final issue price fixed on the listing date which is April 18, was Rs 436 per share. The share hit the Indian markets at Rs 436 on the listing data. 

Stock Performance 

Today, the shares of the company opened flat at Rs 615.05 from the previous day’s closing price of Rs 614.65 on the BSE. Currently, while writing the article, the shares of the company are trading with a gain of 11.93% at Rs 687.95. 

Its 52-week high price is Rs 692.10 which also coincides with the intraday high of the current trading session and its 52-week lows price is Rs 347.30. The current market capitalisation of the company is Rs 4491.80 Crore. 

Over the past week, the company’s shares have delivered an impressive return of 14.12%. Looking at the last month, the return stands at a substantial 38%. When considering the return based on the listing price, the shares have yielded approximately 58% over 86 days despite the flat listing on the listing date. 

Financial Performance 

If we check the company’s financials, annual revenue experienced a substantial increase of 12.37%, rising from Rs 841 Crore to Rs 945 Crore. The operating profit of the company stands at Rs 113 Crore, accompanied by an operating profit margin of 12%. The company is maintaining this margin at 12% since last year. Furthermore, the net profit of the company amounts to Rs 52 Crore. The company’s return on capital employed (ROCE) and return on equity (ROE) are reported as 16.7% and 15.8%, respectively. 

Regarding ownership, the promoters of Avalon Technologies Limited possess 70.64% of the company’s shares. Surprisingly, there is no ownership stake held by foreign institutional investors (FIIs) and domestic institutional investors (DIIs). The remaining portion, which accounts for 29.26% of the shares, is owned by public investors. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.