Avalon Technologies Ltd, the Chennai-based integrated Electronic Manufacturing Services (EMS) company, will raise ₹1,025 crore through an Initial Public Offering. It has received SEBI’s nod in this regard.

The IPO will consist of a fresh issue of equity shares aggregating up to ₹400 crore and an Offer for Sale aggregating up to ₹625 crore by the selling shareholders, according to the draft red herring prospectus (DHRP) filed by the company with the market regulator.

As of fiscal 2022, its revenue from operations was ₹840 crore with an order book (open order) worth ₹1,039 crore as of June 30, 2022.

‘Observation letter’

The company had filed the DRHP with SEBI in August 2022, and as per the update on SEBI website it obtained an “observation” letter from SEBI on January 16, 2023. Its observation implies its approval to float an IPO.

The company’s clients include Kyosan India Private Ltd, Zonar Systems Inc., Collins Aerospace, e-Infochips Private Limited, The US Malabar Company, Meggitt (Securaplane Technologies Inc) and Systech Corporation.

The proceeds from the IPO will be used towards funding the prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company and one of its Material Subsidiaries, ie. Avalon Technology and Services Private Limited; funding the working capital requirements and general corporate purposes.

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Incorporated in 1999, Avalon provides a full stack product and solution suite, right from printed circuit board design and assembly to the manufacture of complete electronic systems (Box Build), to certain global original equipment manufacturers (OEMs), including those located in the US, China, Netherlands and Japan, the prospectus said

Avalon has manufacturing units in Atlanta and Fremont in the US; seven units in Chennai; one in Kanchipuram and two units in Bengaluru. The company employ around 2,000 people, according to information on its web site.

JM Financial, DAM Capital Advisors, IIFL Securities and Nomura Financial Advisory and Securities (India) Private Limited are the Book Running Lead Managers for this IPO. The equity shares are proposed to be listed on BSE and NSE.