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Elin Electronics IPO Review: Elin Electronics Limited is coming up with its Initial Public Offering. The IPO will open for subscription on December 20th, 2022, and close on December 22nd, 2022. It is looking to raise Rs. ₹475.00 Crores. In this article, we will look at the Elin Electronics IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out! 

Elin Electronics IPO Review – About The Company

Founded in 1969, Elin Electronics Ltd. is a leading electronics manufacturing services provider. The company is India’s largest fractional horsepower motors manufacturer in India. The company also offers end-to-end product solutions and provides its manufacturing services both as an original equipment manufacturer (OEM) and an original design manufacturer (ODM).

It has 3 manufacturing facilities located in Uttar Pradesh(Ghaziabad), Himachal Pradesh (Baddi), and Goa(Verna). In Ghaziabad, the company also has its centralized R&D center. Here they focus on the R&D of all aspects of OEM and ODM models including concept sketching, design refinement, generating optional features, and testing.

Services Provided by the company:

Elin Electronics Ltd has a diversified products portfolio which includes:

● Lighting products (LED), fans (ceiling, fresh air, and TWP fans), modular switches, and sockets.

● Small appliances like dry and steam irons, toasters, hand blenders, mixer grinders, hair dryers, and hair straighteners.

● Fractional Motors ( These are used in mixer grinder, hand blender, wet grinder, chimney, air conditioner, heat convector, TPW fans etc.)

Elin Electronics IPO Review – Financial Highlights

If we look at the financials of Elin Electronics Ltd. we find out that their assets have grown from Rs. 397.73 crores in March 2019 to Rs. 532.61 crore in March 2022. Their revenues also follow a similar trend despite suffering a drop in March 2020. Their revenues have grown at a CAGR of 5.7% from Rs. 829.74 crores in March 2019 to Rs. 1,094.67 crores in March 2022. Their profits grew at a CAGR of 6.13% from Rs. 29.07 crores in March 2019 to Rs. 39.15 crore in March 2022. It is also important to note that the company’s borrowing also increased during this period from Rs. 86.64 crores to Rs. 102.33 crores.

Balance Sheet of the company 

Elin Electronics IPO Review - finacials

(Source: DRHP of the company)

Profit and loss Statement of the company

Profit and Loss Chart

(Source: DRHP of the company)

Strengths

Following are the competitors of the company in each of its product verticals:

  • Small appliances: Smile Electronics, PG Electroplast and Indic.
  • Fractional horsepower motors: Marathon and Amber (PICL).
  • LED lighting and flashlights: Dixon and RK Lighting.
  • Fans: Yash Electronics, Tiberwala and KKG Industries.
  • Sheet metal: JBM Auto, Panse Auto, Autoline Stamping, SM Auto and Delco Industries.
  • Plastic moulding: Varroc Engineering, Plastic Opium, Motherson Sumi, Magna Styr, Prakash Plastics, Affy India, SSI Moulds, BDI Group, Multitek, and Ashuman Auto.
  • The company is the leading electronics manufacturing services (“EMS”) manufacturer of end-to-end product solutions for India’s top brands of lighting, fans, and small/ kitchen appliances.
  • The company has diversified products, product verticals, and customer base which enables the company to balance out any impact or risk incurred with respect to any single product, product vertical, or customer.
  • The company has an established customer base with well-known domestic and multi-national customers which include Philips, Bosch, and Panasonic
  • High levels of backward integration lead to higher efficiencies, enhanced quality of products, and customer retention capability
  • The company has been able to maintain a consistent and strong track record of financial performance

Weaknesses

  • A substantial portion of companies revenue is generated from some of its key customers, any loss in the relationship with these customers can have an adverse effect on the revenues of the company.
  • The company’s operations may fluctuate from time to time due to seasonality which can have an impact on its financial performance.
  • The company employs contract labor to carry out certain functions of its business operations. Any failure by the agencies to make payments to the laborers could disrupt business operations.
  • As the company buys its raw materials on a purchase order basis, any discrepancies relating to raw materials can impact the operations of the business.
  • The company’s finances can be negatively impacted by any defaults or payment delays made by a significant portion of its clients.

Elin Electronics IPO Review – Key IPO Information

ParticularsDetails
IPO Size₹475.00 Cr
Fresh Issue₹175.00 Cr
Offer for Sale (OFS)₹300.00 Cr
Opening dateDec 20, 2022
Closing dateDec 22, 2022
Face Value₹5 per share
Price Band₹234 to ₹247 per share
Lot Size60 Shares
Minimum Lot Size1 (60 Shares)
Maximum Lot Size13 (780 Shares)
Listing DateDec 30, 2022

Promoters: Mangi Lall Sethia, Kamal Sethia, Kishore Sethia, Gaurav Sethia, Sanjeev Sethia, Sumit Sethia, Suman Sethia, Vasudha Sethia And Vinay Kumar Sethia

Book Running Lead Manager: Axis Capital Limited, JM Financial Limited

Registrar to the Offer: KFin Technologies Limited

The Objective of the Issue

The net proceeds from this issue will be utilized for the following purposes:

  • Repayment/ prepayment of certain borrowings availed by the company in full or in part
  • Financing capital expenditure for upgrading and expanding the company’s existing facilities at (i) Ghaziabad, Uttar Pradesh, and (ii) Verna, Goa
  • General corporate purposes

In Closing

In this article, we looked at the details of Elin Electronics IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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