Aimtron Electronics Limited is engaged in the business of providing products and solutions towards electronics system design and manufacturing ('ESDM') services with a focus on high value precision engineering products. They provide product and solutions right from printed circuit board ('PCB') design and assembly to the manufacturing of complete electronic systems ('Box Build'), to certain domestic and global manufacturers located in India, United States of America, Hongkong, United Kingdom, Spain, Mexico. They offer tailored solutions for customers' needs, encompassing automated micro-electronics assembly and precision component integration. The solutions involve the client providing the design for the product for which they provide manufacturing services or in some cases require them to design the relevant product based on the specifications provided by the client including manufacturing of the product. The solutions primarily comprises of: (i) printed circuit board assembly ('PCBA'), (ii) any box build assemblies in addition to finding its application in battery management systems used in electrical vehicles (iii) design solutions offering end to end services right from conceptualizing the design, engineering, product prototype development, manufacturing of turnkey requirements for the customers. Through the end-to-end capabilities, they believe the customers may achieve tangible benefits such as reduced manufacturing costs, improved supply chain management and reduced inventory obsolescence. The Company offers a broad range of products and services across multiple industry segments. These ESDM products and services are essential for industrial automation, electric vehicle mobility, IoT and embedded systems, medtech and wearables, gaming, robotics etc. They provide higher-level monitoring and control various functions of machines to define, organize, and meet production objectives. The end-use industries that they cater to include: Industrial sector, Medical & Healthcare Equipment, Automobiles, Power, Gaming, Drones and UAV (unmanned aerial vehicle) etc. They operate through the two manufacturing facilities, one situated in Vadodara, Gujarat and the other situated in Bengaluru, Karnataka. The manufacturing facilities include engineered layout with process controls and necessary automations for quality and productivity. This allows them to keep the core competencies within the Company, allowing them to ensure strict quality control and safety at each step of the manufacturing process. The manufacturing facilities comprises of 4 Surface Mount Technology ('SMT') lines, 37 Through (Soldering) Hole setup station ('THT') lines and 2 box build assembly lines. Each of the facilities is accredited with quality standards and certifications. The manufacturing facilities are staffed by a workforce of 132 persons, as of December 31, 2023 which includes a team of 30 engineers to enhance the operational efficiency. The components required in Box Build Assembly or in Design Solutions are imported or sourced from local suppliers and assembled at the manufacturing facilities. The manufacturing capabilities has enabled them to address the consumers' diverse needs, enhance existing products with emerging technologies, development of new products and optimize costs across the products through value analysis and value engineering. As per financial performance, Aimtron Electronics Limited has posted total income / net profits of Rs 54.06 Cr / Rs 15.71 Cr (FY21), Rs 26.89 Cr / Rs (1.80) Cr (FY22), Rs 72.40 Cr / Rs 8.63 Cr (FY23) and Rs 67.64 Cr / Rs 9.77 Cr (upto Q3 FY24). So as per previous financials data, company has shown zig-zag results, but sudden rise in net-profit just before IPO is very surprising. Company has posted an average EPS of Rs 9.14 and average RoNW of 23.09% for last three fiscals. Issue is priced at a P/BV of 5.71 as per NAV of 28.19 as on 31.12.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around (182.39), 38.07 and 25.24 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 43 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price on the day of listing. As of now from last 10 SME IPOs, all are trading above issue price. ( As on 25.05.24 ) As per financials, Aimtron Electronics Limited has shown zig-zag results, RoNW is 27.64% and P/E is respectively (182.39), 38.07 and 25.24 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit is very surprising. Company is engaged in the business of providing products and solutions towards electronics system design and manufacturing (“ESDM”) services with a focus on high value precision engineering products, which is niche business segment. BRLM performance is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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