Elin Electronics IPO Basis of Allotment

Elin Electronics Limited ("Company" or "Issuer") was originally incorporated on March 26,1982 at Kolkata. West Bengal as a private limited company under the Companies Act. 1956, with the name 'Elin Electronics Private Limited pursuant to a certificate of incorporation granted by the Registrar of the Companies, West Bengal at Kolkata ("RoC") Subsequently, the name of our Company was changed to Elin Electronics Limited' upon conversion of our Company into a public company pursuant to a special resolution passed by our shareholders on July 27,1987 and the certificate of incorporation was amended by the RoC consequent upon change of name on conversion to public limited company on November 22.1987. For further details in relation to change in the address of registered office of our Company, see "History and Certain Corporate Matters" on page 208 of the prospectus of the Company dated December 23, 2022 filed with the RoC ("Prospectus")

Our Company has filed the Prospectus dated December 23, 2022, with the RoC, and the Equity Shares proposed to be listed on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") and trading is expected to commence on December 30, 2022.

INITIAL PUBLIC OFFERING OF 19,230,746 EQUITY SHARES OF FACE VALUE OF Rs 5 EACH ("EQUITY SHARES') OF OUR COMPANY FOR CASH AT A PRICE OF Rs 247 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs 242 PER EQUITY SHARE) ("OFFER PRICE") AGGREGATING TO 4,750 MILLION (THE "OFFER") COMPRISING A FRESH ISSUE OF 7,085,020 EQUITY SHARES AGGREGATING TO Rs 1,750 MILLION BY OUR COMPANY (THE "FRESH ISSUE") AND AN OFFER FOR SALE OF 12,145,726 EQUITY SHARES AGGREGATING TO Rs 3,000 MILLION, COMPRISING 695,627 EQUITY SHARES BY KAMAL SETHIA AGGREGATING TO Rs 171.82 MILLION, 1,137,165 EQUITY SHARES BY KISHORE SETHIA AGGREGATING TO Rs230.88 MILLION, 1,027,368 EQUITY SHARES BY GAURAV SETHIA AGGREGATING TO Rs 253.76 MILLION, 269,716 EQUITY SHARES BY SUMIT SETHIA AGGREGATING TO Rs 66.62 MILLION, 1,235,465 EQUITY SHARES BY SUMAN SETHIA AGGREGATING TO Rs 305.16 MILLION, 337,246 EQUITY SHARES BY VASUDHA SETHIA AGGREGATING TO Rs 83.30 MILLION, 200,850 EQUITY SHARES BY VINAY KUMAR SETHIA AGGREGATING TO Rs 49.61 MILLION (THE "PROMOTER SELLING SHAREHOLDERS") AND 7,242,289 EQUITY SHARES AGGREGATING TO Rs 1,768.85 MILLION BY THE PERSONS LISTED IN THIS PROSPECTUS (THE "OTHER SELLING SHAREHOLDERS" AS DEFINED BELOW) (THE PROMOTER SELLING SHAREHOLDERS AND THE OTHER SELLING SHAREHOLDERS COLLECTIVELY, THE "SELLING SHAREHOLDERS'", AND SUCH EQUITY SHARES OFFERED BY THE SELLING SHAREHOLDERS, THE "OFFERED SHARES") (SUCH OFFER FOR SALE BY THE SELLING SHAREHOLDERS, THE "OFFER FOR SALE" AND TOGETHER WITH THE FRESH ISSUE, "THE OFFER").

 

RISK FACTORS ASSOCIATED WITH OUR COMPANY ARE:

• Our top 5 customers accounted, cumulatively, for 69.03%, 62.93%, 63.20% and 65.43% of our revenue from operations in Fiscals 2020, 2021 and 2022 and the six-month period ended September 30, 2022, respectively. Further, our top 10 customers accounted, cumulatively, for 80.81%, 77.90%, 77.14% and 81.04% of our revenue from operations in Fiscals 2020, 2021 and 2022 and six-month period ended September 30, 2022, respectively. Loss of relationship with any of these customers may have a material adverse effect on our profitability and results of operations.

• Our past profitability ratios have been low. There is no guarantee that the profitability ratios will improve in future and our company will be able to generate higher returns.

Notes:

*Source: www.rbi.org.in /. The par yield is pre-tax. ** Not Annualised \ PAT Margin (%) is calculated as profit after tax as a % of total income Return on Total Assets is calculated as profit after fax as a % of total assets #For the ended March 27, 20201 ## For the week ended March 25, 2021   ## For the week ended April 20221 ### For the week ended September 30, 2022

• A significant portion of our revenue is generated from our sub product segments (i) LED lighting, fans and switches (ii) Small appliances and (iii) Fractional horsepower motors which accounted, cumulatively, for 77.10%, 73.46%, 75.39% and 74.72% of our revenue from operations in Fiscals 2020, 2021 and 2022 and the six-month period ended September 30, 2022, respectively. If we are unable to manage our diversified operations, our business, results of operations and financial condition may be adversely affected.

• We had negative operative cash flows in the past, details of which are given below. Sustained negative operative cash could impact our growth and business.

(Rs million)

Net cash used in operating activities for Fiscal 2021 was Rs 336.43 million primarily attributable to increase in trade receivables by Rs 919.10 million, increase in inventories by Rs 350.93 million, decrease in trade payables by Rs 365.81 million and increase in other non current assets by Rs37.91 million on account of COVID-19 restrictions.

• Our Company will not receive any proceeds from the Offer for Sale portion of the Offer.

• The Offer Price, Enterprise Value to EBITDA, Enterprise Value to Net Sales and Price Earning ratio on the Offer Price of our Company may not be indicative of the market price of the Equity Shares on listing or thereafter.

Note: Closing price as on November 11, 2022 has been considered for peer group for calculation of Price to Earnings ratio for industry.

• We as well as our customers operate in a competitive industry, with participants in the organized and the unorganized sector. Some of our competitors in the industry may have greater design, engineering, manufacturing, financial capabilities, or superior resources. Our customers evaluate the product suppliers based on, among other things, manufacturing capabilities, speed, quality, engineering services, flexibility, and costs. Therefore, we are exposed to risks of our competitors having better resources than us.

• Details of weighted average cost of acquisition of all Equity Shares transacted in last three years, 18 months and one year preceding the date of the Prospectus:

• Our return on Net Worth in the six months ended September 30, 2022 and in Fiscal 2022, Fiscal 2021 and Fiscal 2020 was 6.46%, 12.92%, 13.29% and 12.07%, respectively, and our weighted average return on Net Worth for Fiscal 2022, Fiscal 2021 and Fiscal 2020 was 12.90%.

• The two BRLMs associated with the Offer have handled 63 public issues in the Fiscal 2023, Fiscal 2022, Fiscal 2021 and Fiscal 2020, out of which 23 issues closed below the offer price on the listing date.

* Issues handled where there were no common BRLMs.

THE EQUITY SHARES OF OUR COMPANY WILL GET LISTED ON MAIN BOARD PLATFORM OF BSE AND NSE

The Offer mss made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended ("SCRR"), read with Regulation 31 of the SEBI ICDR Regulations. The Offer was made through the Book Building Process in terms of Regulation 6(1) of the SEBI ICDR Regulations, wherein not more than 50% of the Offer was made abatable for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs and such portion, the "QIB Portion"), provided that our Company, in cons Station with the BRLMs, associated up to 60% of the QIB Portion to Anchor Investors on a discretionary bass ("Anchor Investor Portion"), out of which one-third portion was reserved for domestic Mutual Funds only. subject to valid Bids having been received from domestic Mutual Funds at or above the price at which allocation was made to Anchor Investors ("Anchor Investor Allocation Price"), in accordance with the SEBI ICDR Regulations Further, 5% of the Net QIB Portion was made available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Net QIB Portion was made available for allocation on a proportionate basis to al QIB Bidders Including Mutual Funds, subject to valid Bids having been received from them al or above the Offer Price. Further, not less than 15% of the Offer was made available for allocation to Non-Institutional Bidders, of which (a) one third of such portion was reserved for applicants with application size of more than Rs 200,000 and up to 71,000,000; and (b) two third of such portion was reserved for applicants with application size of more than 71,000,000, provided that the unsubscribed portion in either of such sub-categories were allocated to applicants in the other sub-category of Non-Institutional Bidders and not less than 35% of the Offer was made available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids having been received from them all or above the Offer Price. All potential Bidders (except Anchor Investors) were mandatory required to utilise the Application Supported by Blocked Amount ("ASBA") process by providing details of the* respective ASBA accounts and UPI ID in case of UPI Bidders using the UPI Mechanism, as applicable, pursuant Co which their corresponding Bid Amount will be blocked by the Self Certified Syndicate Banks ("SCSBs") or by the Sponsor Banks under the UPI Mechanism, as the case may be. Co the extent of the respective Bid Amounts. Anchor Investors were not permitted to participate in the Otter through the ASBA Process. For further details see "Offer Procedure' on page 357 of the Prospectus.

The bidding for Anchor Investor opened and closed on December 19, 2022. The Company received 15 applications from 6 Anchor Investors for 6,073,620 Equity Shares. The Anchor Investor Offer Price was finalized at Rs 2471- per Equity Share A total of 5,769,223 Equity Shares were allocated under the Anchor Investor Portion aggregating to Rs 142,49,98,081

The Offer received 223 180 applications for 50,253,360 Equity Shares [prior to technical rejections but after removing multiple bids, duplicate bids and bids not banked) resulting in 2.61 tines subscription. The details of the applications received in the Offer from Retail Individual Bidders. Non-Institutional Bidders and QIBs are as under (prior to technical reactions but after removing multiple bids, duplicate bids and bids not banked)

Final Demand

A summary of the final demand as per BSE and NSE as on the Bid/Offer Closing Date at different prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being BSE on December 27, 2021

A. Allotment to Retail Individual Bidders (After Technical Rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual Bidders, who have bid at cut-off or at the Offer Price of 247 per Equity, was finalized in consolation with BSE. This category has been subscribed to the extern of 2,26025 times. The total number of Equity Shares Allotted in Retail Individual Bidders category is 6,730,762 Equity Shares to 112,179 successful applicants. The category-wise details of the Basis of Allotment are as under

Please Note 1 additional Share shall be allotted to 22 Allottees from amongst 8211 Successful Applicants from the categories 120-780 (ie. excluding successful applicants from Category 60) in the ratio of 22:8211

B. Allotment to Non-Institutional Bidders (more than 72 lakhs and upto Rs 10 lakhs) (After Technical Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-Institutional Bidders (more than Rs 2 lakhs and upto Rs 10 lakhs) who have bid at the Offer Price of Rs 247 per Equity Share or above, was finaized in consultation with BSE This category has been subscribed to the extent of 4 06337 The Total number of Equity Shares allotted in this category is 961,537 Equity Shares to 1,144 successful applicants. The category-wise details of the Basis of Allotment are as under.

Please Note: 8 additional Share shall be allotted to 67 Successful Allottees from the categories 900-4020 (i e, excluding successful applicants from Category 840) m the ratio of 1:1

Please Note: 1 additional Share shall be allotted to 41 Allottees from amongst 67 Successful Allottees from the 900 - 4020 (i e excluding successful applicants from Category 840) in the ratio of 41:67

C. Allotment to Non-Institutional Bidders (more than Rs 10 lakhs) (After Technical Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-Institutional Bidders (more than Rs 10 lakhs), who have bid at the Offer Price of Rs 247 per Equity Share or above, was finalized In consultation with BSE This category has been subscribed to the extent of 2,99623 limes The total number of Equity Shares allotted in this category is 1,923,075 Equity Shares to 1,255 successful applicants The category-wise details of the Basis of Allotment are as under

Please Note : 1 additional share has been allocated to category 4080 in the raito of 142:143

D. Allotment to QIBs (After Technical Rejections)

Allotment to QIBs. who have bid at the Offer Price of Rs 247 per Equity Share or above, has been done on a proportionate basis in consultation with BSE. This category has been subscribed to the extent of 4,73482 times of Net QIB portion As per the SE8I Regulations, Mutual Funds were allotted 5% of the Equity Shares of Net QIB portion available i.e. 192.308 Equity Shares and other QIBs and unsatisfied demand of Mutual Funds were allotted the remaining available Equity Shares i e. 3,653,841 Equity Shares on a proportionate basis. The total number of Equity Shares allotted in the QIB category is 3,846,149 Equity Shares, which were allotted to 15 successful Applicants.

F. Allotment to Anchor Investors (After Technical Rejections)

The Company, the Investor Selling Shareholders in consultation with the BRIM haw allocated 5,769,223 Equity Shares to 15 Anchor Investors (through 8 Anchor Investor Application Forms) (inducing 4 domestic Mutual Funds through 11 schemes) at an Anchor Investor Offer Price at Rs 247 per Equity Share n accordance with SEBI ICDR Regulations This represents 60% of the QIB portion.

The IPO Committee of the Board of Directors of the Company has taken on record the basis of allotment of Equity Shares approved by the Designated Stock Exchange, being BSE and has allotted the Equity Shares to various successful applicants at their meeting held on December 28 2022 The Allotment Advice Cum Refund Intimation and/or notices have been dispatched to the address of the investors as registered with the depositories. Further instructions to the SCSBs have been issued for unblocking of funds and transfer to the Pubic Offer Account on December 27, 2022 and the payments to non-syndicate brokers have been issued on December 28, 2022 In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares allotted to the successful allottees have been uploaded on December 28, 2022 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned The Company has filed the Listing application with NSE and BSE on December 28, 2022 and has received the listing and trading approval from NSE & BSE on December 29, 2022 The listing and trading will commence on December 30, 2022.

Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Prospectus.

INVESTORS PLEASE NOTE

These details of the Allotment made shall be hosted on the website of Registrar to the Offer KFin Technologies Limited at www.kfintech.com

All future correspondence n this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First/Sole applicant Serial number of the Bid cum Application form number, Bidders DP ID. Client ID PAN, date of submission of Bid cum Application Form, address of the Bidder. number of Equity Shares bid for, name of the Member of the Sydicate, place where the bid was submitted and payment details at the address given below

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF EUN ELECTRONICS LIMITED.

ELIN ELECTRONICS has filed a prospectus dated December 23, 2022 (the "Prospectus") with the RoC The prospectus shall be made available on the website of the SEBI at www.sebi.gov.in  as well as on the webs-les of the BRIMs i.e. Axis Capital Limited at www.axiscapital.co.in  and JM Financial Limited at www.jmfl.com  the website of the National Stock Exchange of India Limited at www.nseindia.com   and the website of the BSE Limited at www.bseindia.com   respectively Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risks, see 'Risk Factors' beginning on page 26 of the Prospectus. Potential investors should not rely on the DRHP for any investment decision

The Equity Shares have not been and will not be registered under the U.S Securities Act of 1933, as amended (the "U.S Securities Act") or any state securities laws in the United States, and unless so registered, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to. the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly the Equity Shares are being offered and sold outside the United Slates in offshore transactions in reliance on Regulation S and the applicable laws of each jurisdictions where such offers and sales are made There will be no public offering of the Equity Shares in the United States.