Cannes Technology, a leading EMS company in professional electronics, has filed for a draft Red Herring Prospectus (DRHP) with SEBI to initiate its Initial Public Offering (IPO).
IPO Price includes latest issues 650 crore, while the Offer for Sale (OFS) of up to 72 lakh shares by the shareholders.
Promoter Ramesh Kunhikannan will sell 3.7 million equity shares in the OFS, while investor Freni Firoz Irani will sell 3.5 million equity shares in the issue.
The face value of the equity shares offered in the IPO will be 10 each.
However, details of the total number of shares, price band, timeline, bid lot size and reserve share among others will be announced in due course.
DAM Capital Advisors and IIFL Securities are acting as the book-running lead managers for the IPO.
The company will use the net proceeds of the new issue for:
1. Full or partial repayment of certain borrowings taken by the company. from the latest issue, 130 crore will be used here.
2. 98.93 crore will be used for expansion of existing manufacturing facility in Mysore, Karnataka and capital expenditure funding near existing manufacturing facility at Manesar, Haryana.
3. Forward Rs 149.3 crore will be earmarked for investment in Cannes Electronics Manufacturing Pvt Ltd, a wholly owned subsidiary, to set up a new facility in Chamarajanagar, Karnataka.
4. About 114.74 crore will be used for financing the working capital requirements of the company; And
5. General Corporate Purposes.
With over three decades of experience, Cannes Technology is a leading end-to-end and IoT solution-enabled integrated electronics manufacturing player, with capabilities across the entire spectrum of Electronics System Design and Manufacturing (“ESDM”) services. It will be one of the first companies in India to offer design-based electronics manufacturing to Original Equipment Manufacturers (“OEMs”) using our mature embedded design capabilities.
The company’s revenue from operations grew at a CAGR of 7.46% 3,642.31 million in FY19 4,206.27 million in the financial year 2021 and was 4,677.75 million in the nine months ended December 31, 2021, while EBITDA grew at a CAGR of 8.01%. From 350.48 million as on 31 March 2019 408.91 million as on March 31, 2021, and was 536.54 million in the nine months ended December 31, 2021
As per the draft, the total addressable ESDM market in India was assessed as: 2,654 billion ($36 billion) in fiscal year 2021 and is expected to grow 9,963 billion ($135 billion) in FY 2026 with a CAGR of 30.3%. However, the contribution of Indian ESDM companies is around 40%, the value of which is 1,069 billion ($14 billion) in FY 2021, expected to grow at a CAGR of 41.1% 5,978 billion ($81 billion) by fiscal year 2026.
India is positioned not just as a low-cost option, but as a destination for high quality design work.