Electronics equipment contract maker Avalon Technologies is listed on the exchanges without the expected drama. Analysts now see limited upside in the near term, allowing some profits to be booked.

The stock opened at Rs 431 on the BSE, while the issue price was Rs 436 per share and is listed at Rs 436 on the NSE.

Avalon Technologies is one of the leading fully integrated Electronics Manufacturing Services (EMS) companies providing end-to-end operations in India for Box-Based Solutions for Industrial, Mobility, Medical Devices, Solar, Electric Vehicles (EV) and many more industries), hydrogen and digital communications and infrastructure, through 12 manufacturing plants in India and the United States. A 13th facility in Chennai is currently under construction.

Analysts believe the company’s diversified business could lead to a strong growth path. In addition to building relationships with a large customer base, the company has a global delivery footprint of high-quality standards and advanced manufacturing and assembly capabilities, which has some investors excited.

According to SBI Securities, Avalon Technologies has been valued at the upper end of Rs 436, at a price-to-earnings multiple of 55.5 times based on the annualized return on capital post-issuance in August FY23.

The Rs 865 crore initial public offering of the electronics manufacturing services company was 2.21 times subscribed between April 3-6, mainly from accredited institutional investors. Most brokerages give the issue a “subscribe with a long-term” rating given the tailwind from Aatmanirbhar Bharat and the long-term benefits from the vertical’s production-linked incentive scheme (PLI scheme).

Another concern for investors is the higher offer for sale (OFS) portion of the IPO. Proceeds from the OFS go directly to the shareholders who sold the shares, and the company receives no benefit from it.