Should you invest in Elin Electronics Limited IPO?

Elin Electronics Limited incorporated on March 26, 1982, is a leading electronics manufacturing services (“EMS”) manufacturer of end-to-end products solutions for major brands of lighting, fans, and small/ kitchen appliances in India, and is one of the largest fractional horsepower motors manufacturers in India. It manufactures and assembles a wide array of products and provides end-to-end product solutions serving under both original equipment manufacturer (“OEM”) and original design manufacturer (“ODM”) business models. Its diversified product portfolio in EMS includes i) LED lighting, fans, and switches including lighting products, ceiling, fresh air, and TPW fans, and modular switches and sockets, ii) small appliances such as dry and steam irons, toasters, hand blenders, mixer grinders, hair dryer, and hair straightener; iii) fractional horsepower motors, which is used in mixer grinder, hand blender, wet grinder, chimney, air conditioner, heat convector, TPW fans, etc.; and iv) other miscellaneous products.

Should you invest in Elin Electronics Limited IPO?

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The company has three manufacturing facilities which are strategically located in Ghaziabad (Uttar Pradesh), Baddi (Himachal Pradesh), and Verna (Goa). Elin has a centralized R&D center in Ghaziabad (Uttar Pradesh) and as on October 31, 2022, their R&D team consisted of 171 employees, including engineers, designers, and other workers.

Promoters & Shareholding:

Mangi Lall Sethia, Kamal Sethia, Kishore Sethia, Gaurav Sethia, Sanjeev Sethia, Sumit Sethia, Suman Sethia, Vasudha Sethia, and Vinay Kumar Sethia are the company promoters. 

Pre Issue Share Holding53.98%
Post Issue Share Holding32.93%

Also read : Debt Mutual Funds – Types, Taxation, Indexation benefit, Risk and suitability

Public Issue Details:

Offer for sale: OFS of approx. 7,085,020 equity shares at Rs. 5, aggregating up to Rs. 175 Cr and fresh of approx. 12,145,748 equity shares at Rs. 5, aggregating up to Rs. 300 Cr.

Total IPO Size: Rs. 475 Cr.

Price band: Rs. 234 – Rs. 247.

Objective: For repayment/ prepayment of borrowings, funding capital expenditure, and general corporate purposes.

Bid qty: minimum of 60 shares (1 lot) for Rs. 14,820 and maximum of 13 lots.

Offer period: 20th Dec 2022 – 22nd Dec 2022.

Date of listing: 30th Dec 2022.

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  1. Diversified products resulting in a de-risked business model.
  2. It is one of the largest fractional horsepower motors manufacturers in India.
  3. The company has established relationships with a marquee customer base.
  4. A high degree of backward integration resulting in higher efficiencies has enhanced the quality of products and customer retention capability.
  5. Professional and experienced management team.


  1. The company is highly dependent on certain key customers for a substantial portion of its revenues.
  2. Some of the corporate records relating to allotments made by the company and transfers and acquisitions of equity shares made by the promoters are not traceable.
  3. The company and its customers operate in a highly competitive industry.
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Subscribe or avoid?

Sectorial outlook – The global electronics industry has evolved tremendously over the last 60 years. Global demand for the electronics industry is created by emerging and multiple disruptive technologies. The overall electronics market is inclusive of electronics products, electronics design, electronics components, and electronics manufacturing services. Traditionally a strong growth market, however, the market contracted by 3.4 % in 2020, owing mostly to a decline in private expenditure triggered by the COVID-19 pandemic. The global electronics industry has been valued at $2,288 billion in 2020. The industry is expected to grow at a CAGR of 5.2 % to reach $2,955 billion by 2025. Some of the critical factors driving this growth are increasing disposable income, improved acceptability of audio and video broadcasting, higher internet penetration, the inclination of the youth towards next-gen technologies, the emergence of e-commerce, etc. The EMS market was established more than five decades ago to execute manufacturing designs from government, defense, and research institutions. As the years progressed, the EMS market grew to support the demand that exceeded the manufacturing capacity of the Brands. Across nations, there is a strong government push to broaden the operations and revenue from the electronics industry. The government of India has been proactively building a base for electronics manufacturing in India and it has launched numerous incentive schemes, which have allowed manufacturing growth, reduced dependence on imports, and promoted exports. The GOI has launched numerous policies over the last few years to increase innovation, protect intellectual property, and develop the best-in-class electronics manufacturing set-up to build a favorable environment and invite investment in electronics hardware manufacturing. India’s electronics production has more than doubled in the past five years from Rs. 3.2 Trillion in FY16 to Rs. 7.8 Trillion in FY21 depending on such favorable incentive schemes. All of the above are expected to have a positive impact on the sector the company is operating in the long term.

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The financials (revenue and net profit) are shown in the graph below:

Valuation – For the last 3 years average EPS is Rs. 8.2 and the P/E is around 29.8x on the upper price band of Rs. 247. The EPS for FY22 is Rs. 9.59 and the P/E is around 25.75x. If we annualize Q2-FY23 EPS of Rs. 5.06, P/E is around 24.4x. It has Dixon Technologies Ltd (103.5x) and Amber Enterprises India Ltd (52.2x) as its listed peers as per the RHP. The company’s P/E is between 29.8x and 24.4x. It has been able to maintain margins and grow EPS and revenue consistently. Looking at the valuation, it seems to be reasonable.

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Recommendation – The Company is a leading electronic manufacturing services manufacturer of the end to end product solutions for major brands with a high degree of backward integration. After considering all the factors the listing still seems reasonable with great prospects, especially when compared to its peers hence we would recommend “Subscribe” to this IPO for investors from a medium to long-term perspective.


This article should not be construed as investment advice, please consult your Investment Adviser before making any investment decision.

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