Avalon Technologies Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise around Rs 1,025 crore in an IPO.

The IPO will consist of an issue of new shares of Rs 400 crore and a sale offer of up to Rs 625 crore from its existing shareholders and promoters.

OFS will include Kunhamed Bicha up to Rs 130 crore, Bhaskar Srinivasan up to Rs 210 crore, TP Imbichammad up to Rs 34 crore, Mariyam Bicha up to Rs 12 crore and Anand Kumar up to Rs 79.51 crore by Sareday Seshu Kumar and Luquman Veedu Ediyanam.

Proceeds from the issue worth Rs 150 crore will be used to repay debt. The company’s total outstanding borrowings stood at Rs 312.27 crore as of June 2022.

The company will also use Rs 150 crore to meet its working capital needs. As of March 2022, the bank has separately approved Rs 126.50 crore to its companies through a fund-based working capital facility.

Avalon Tech may conduct a pre-IPO placement of Rs 80 crore, DRHP said.

JM Financial, DAM Capital Advisors, IIFL Securities and Nomura Financial Advisory and Securities India are the lead managers for the offering.

The company is one of the leading fully integrated electronic manufacturing services (EMS) companies with high-valued capabilities to deliver boxed solutions in India, focusing on high-value precision engineered products.

It offers a complete stack of products and solutions, from printed circuit board (PCB) design and assembly to complete electronic system (Box Build) manufacturing, to certain global original equipment manufacturers (OEMs), including those located in the US, China Equipment Manufacturers (OEM), Netherlands and Japan. The company has 12 manufacturing plants in India and the US. It specialises in manufacturing and providing design support for critical integrated assemblies, subassemblies, assemblies and enclosures across multiple verticals.

Its total revenue rose to Rs 851.65 crore in FY22 from Rs 69,590 crore a year ago. Net profit for the year stood at Rs 68.16 crore compared to Rs 23.08 crore last year, while the EBITDA margin improved to 11.6% this year from 9.58% a year ago.

The total order book increased to Rs 1,039.15 crore as of June 2022 from Rs 857.87 crore in FY22. Its total number of customers rose to 81 as of March 2022, up from 62 a year earlier.