Avalon Technologies IPO Analysis @ Chanakyanipothi.com,
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Avalon Technologies IPO Promoters
KUNHAMED BICHA AND BHASKAR SRINIVASAN

 Very Elaborate Business Information of Avalon Technologies  

Avlon Technologies is one of the leading fully integrated Electronic Manufacturing Services (“EMS”) companies with end-to end capabilities in delivering box build solutions in India in terms of revenue in Fiscal 2022, with a focus on high value precision engineered products. Through a unique global delivery model, it provides a full stack product and solution suite, right from printed circuit board (“PCB”) design and assembly to the manufacture of complete electronic systems (“Box Build”), to certain global original equipment manufacturers (“OEMs”), including OEMs located in the United States, China, Netherlands and Japan. Through its end-to-end capabilities, it believes its customers may achieve tangible benefits such as reduced manufacturing costs, improved supply chain management and reduced inventory obsolescence.
Its capabilities include PCB design and assembly, cable assembly and wire harnesses, sheet metal fabrication and machining, magnetics, injection molded plastics and end-to-end box build of electronic systems. It specialize in manufacturing and providing design support for critical integrated assemblies, sub-assemblies, components and enclosures for multiple industry verticals. The end-use industries it caters to include a mix of established and long product lifecycle industries, such as industrial, mobility and medical devices and high growth “sunrise” industries, such as solar, electric vehicles and hydrogen in the clean energy sector and digital infrastructure in the communications sector.

Certain of its key customers include Kyosan India Private Limited, Zonar Systems Inc., Collins Aerospace, e-Infochips Private Limited, The US Malabar Company, Meggitt (Securaplane Technologies
Inc) and Systech Corporation, with whom it has had relationships for more than seven years. In addition to maintaining its relationships with existing customers, it has increased its key customer base over time from 54 customers in Fiscal 2020 to 62 customers in Fiscal 2021, to 81 customers in Fiscal 2022, increasing its order book (open order) from Rs 5,046.72 million as of March 31, 2020, to Rs 10,391.49 million as of June 30, 2022.
The company has a diversified client base across multiple end-use industries, it has minimal concentration risk.It has a unique global delivery model, comprising design and manufacturing capabilities across both India and the United States. It is the only Indian EMS company with full-fledged manufacturing
facilities in the United States, which gives it a unique competitive advantage in the North American markets. It has 12 manufacturing units located across the United States and India: one unit in
Atlanta, Georgia, one unit in Fremont, California, seven units in Chennai, Tamil Nadu, one unit in Kanchipuram, Tamil Nadu and two units in Bengaluru, Karnataka. This enables it to offer clients local manufacturing services across these locations depending on their needs, and also leverage favorable policy initiatives such as the ‘Make in India’ program of the Government of India, leading to high customer retention and cost-efficient manufacturing.

Sector Potential: The EMS sector is a sizeable industry globally and in India, and is expected to
grow at a significant pace. While the EMS market in India was valued at Rs 1,469 billion (US$20 billion) in Fiscal 2022 and is expected to grow at a CAGR of 32.3% to reach a value of Rs 4,502 billion (US$60 billion) in Fiscal 2026, the EMS market in the United States was valued at approximately US$140 billion in 2021 and is expected to grow at a CAGR of 6.1% to reach US$188 billion by 2026.
Capabilities and Value Propositions
Avlon is a fully integrated EMS provider and continue to expand its offerings. It started in 1999 as a pure play PCB assembler and have invested in its capabilities and become vertically integrated to include multiple offerings as listed below. it has a significant level of vertical integration in the EMS industry (source: F&S Report), that includes PCB assembly, cable assembly and wire harnesses, sheet metal fabrications and machining, injection molded plastics, magnetics and end-to-end box build.
Qualitative Factors
• End – to – end integrated solutions, providing a “One Stop Shop” for electronics and electro – mechanical design and manufacturing services.
• High entry barriers to business through our collective cross-industry experience, customer engagement
capabilities and leading position in the high mix flexible volume product manufacturing segment.
• Well-diversified business leading to strong growth avenues
• Established relationships with marquee customer base
• Global delivery footprint with high quality standards and advanced manufacturing and assembly capabilities
• Strong financial performance, stable cash flows and visible growth profile
For more information, click www.avalontec.com

Objects of the IPO
The Company proposes to utilize the Net Proceeds towards funding the following objects.
1. Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company
and one of its Material Subsidiaries, i.e., Avalon Technology and Services Private Limited
2. Funding the working capital requirements of the Company

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