Syrma SGS Technology shares extend gains for second day despite weak markets

After making a strong stock market debut on Friday, shares of Syrma SGS Technology extended gains for the second day in a row as the shares rose more than 7% to $342 each on the BSE in early trading on Monday, even as the benchmark Sensex index fell nearly 800% points or more than one percent.

Shares of Syrma SGS Technology finished at a premium of more than 42% on its first trading day on Friday compared to the issue price of its initial public offering of $220 each. Syrma SGS Technology’s Initial Public Offering (IPO) was subscribed 32.61 times on the last day of its public issuance. the $840 crore-IPO received bids for 93,14,84,536 shares against 2,85,63,816 shares on offer.

“The company’s strong listing can be attributed to positive market sentiment, excellent prospects and good investor response. With a huge focus on R&D-based innovation and an experienced management team, the company has managed to break into several growth segments. The company’s geographically diversified manufacturing locations and business model that starts with product concept design and focuses on each segment of the overall industry value chain gives them a competitive advantage over other players,” said Santosh Meena, director of research at Swastika Investmart Ltd.

Syrma SGS Technology IPO had a new issuance of equity shares that added to $766 crores and a sale offer of up to 33,69,360 shares of capital. The price of the initial sale of shares was in the range of $209-220 per share.

The company said net proceeds from the new issue will be used to fund capital expenditure requirements to expand manufacturing, R&D facilities, long-term working capital requirements and general corporate purposes.

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Syrma SGS Technology, incorporated in 2004, is a Chennai-based technology-focused design and engineering company engaged in turnkey electronics manufacturing services (EMS). His clients include TVS Motor Company, AO Smith India Water Products, Robert Bosch Engineering and Business Solution, Eureka Forbes and Total Power Europe BV.

It operates through eleven manufacturing plants in Himachal Pradesh, Haryana, Uttar Pradesh, Tamil Nadu and Karnataka and has three R&D plants located in Tamil Nadu, Haryana and Germany.

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