Sahasra Electronic Solutions Launches SME IPO, Eyes Transition To Main Board By 2026

Sahasra Electronic Solutions Ltd. launched its initial public offering on Thursday. The offering was subscribed 2.67 times as of 04:05 p.m., as per data available of NSE Emerge platform.

The Rs 186-crore book-building issue will be the second-largest SME IPO of 2024, after KP Green Engineering Ltd.'s Rs 189.5-crore public offer. The IPO will be India’s biggest SME IPO on NSE.

Sahasra Electronic Solutions' IPO is a combination of fresh issue of 60.78 lakh shares valued at Rs 172.01 crore and an offer for sale portion of 5 lakh shares totalling Rs 14.15 crore.

The price band for the IPO is set at Rs 269 to Rs 283 per share. Retail investors can bid in the IPO with a minimum lot size of 400 shares, totalling an investment of Rs 1,13,200. For HNIs, it is 2 lots amounting to Rs 2,26,400.

The registrar for the offering is Bigshare Services Pvt. The company has appointed Hem Securities Ltd. as the book-running lead manager and Hem Finlease Pvt. as the market maker for the issue. 

Sahasra Electronic Solutions transitioned from a proprietorship to a public company within the last two to three years. As a new entity, the company needed a three-year financial record to qualify for the main board. Hence, the firm opted for the SME platform, Chief Executive Officer Varun Manwani said. He expressed hope that by 2026, it would be eligible to migrate to the main board.

The company has a robust export-oriented business model, with approximately 80% of its revenue coming from international markets, primarily the United States.

Sahasra's clients include names from the medical and aerospace sectors, Manwani said. Electronics Solutions primarily sells products through its US entity, Optima Technologies, which serves as a local support channel. "This arrangement is more of a pass-through for last-mile connectivity rather than a typical related party transaction," he clarified.

• Issue opens: Sept. 26.

• Issue closes: Sept. 30.

• Issue price: Rs 269-283 per share.

• Fresh issue: 65.78 lakh shares.

• Total issue size: Rs 186 crore.

Sahasra Electronic Solutions Ltd. plans to use the net proceeds from the offer to fund its capital expenditure for the setting up of additional plant and machinery at a new facility in Rajasthan.

The company will further use the funds to invest in its subsidiary Sahasra Semiconductors Pvt.

Additionally, a portion of the funds will be used for working capital requirements and general corporate purposes.

Sahasra Electronic Solutions specialises in the electronic system design and manufacturing sector. The company offers a diverse range of products, including printed circuit board assemblies (PCBAs), LED lighting solutions and a variety of computer and IT accessories. 

The company exports over 80% of its products to global markets in countries USA, UK, Germany and Canada.

The IPO was subscribed 2.67 times as of 04:05 p.m. on Thursday.

• Qualified institutional buyers: 1.12 times.

• Non-institutional investors: 0.20 times.

• Retail investors: 1.35 times.

The grey market premium of Sahasra Electronic Solutions was Rs 190 as of 08:30 a.m., according to Chittorgarh's unit Investorgain. The estimated listing price based on the GMP is Rs 473 per share.

GMP is not an official price quote for the stock and is based on speculation. 

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.