Monday, May 20, 2024

IPO-bound Avalon to focus on clean energy, communication tech

Avalon Technologies Ltd. (Avalon), an electronic manufacturing services (EMS) company, which offers end-to-end box build solutions, is planning to focus on high-growth sectors, such as clean energy and emerging communication technologies, according to the Red Herring Prospectus (RHP) filed with SEBI.

The clean energy sector comprises solar, electric vehicles and hydrogen. The size of this segment was estimated at ₹600 crore in fiscal 2022 in India, and is expected to grow at a CAGR of 87.3%, to reach ₹7600 crore by fiscal 2026, according to a Frost & Sullivan Report.

The communication sector comprises telecom, satellite and digital infrastructure, and the company would focus on high margin value products with medium to long life cycles that need precision engineering.

The company’s IPO is scheduled to open on April 3, 2023 and will close on April 6, 2023. The Public Issue comprises fresh issue of equity shares aggregating up to ₹320 crore and an Offer for Sale of equity shares aggregating up to ₹545 crore. 

Of the ₹320 crore fresh issue, Avalon proposes to utilise the net proceeds towards prepayment or repayment of all or a portion of certain outstanding borrowings availed by it and one of its subsidiaries, funding working capital requirements and for corporate purposes.

Promoted by Kunhamed Bicha and Bhaskar Srinivasan, the company has completed a total pre-IPO placement of ₹160 crore. With 12 manufacturing units in the United States and India, the company is focused on expanding its local manufacturing presence in United States and India by leveraging country-specific government policy initiatives.

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