Chennai: Syrma SGS Technology and SGS Tekniks announced a merger agreement on Wednesday to further strengthen their design and manufacturing capabilities for global and domestic OEMs. The cash cum stock merger will see the creation of Syrma SGS Technologies with a combined turnover of over Rs1000 crores, with 55% revenues coming from exports primarily to the USA and Europe. The deal was supported through a private equity investment by GEF.

“The current revenue of Syrma is over Rs 550 crore; post the merger, we’ll have a combined revenue of Rs 1000 crore,” said Sandeep Tandon, Managing Director, Syrma SGS Technology. “We’re projecting growth between 25% to 30% year-on-year, and by 2021 we aim to achieve Rs 1200 crore in revenue,” Tandon said that with the Indian EMS market is growing at a CAGR of over 25%, there’s an increase in the opportunity to outsource manufacturing in consumer electronics, home appliances, mobile phones, and so on.

“Application areas such as medical electronics and defense electronics are seeing a surge leading to growth in the overall electronics sector. With the government recently announcing incentive schemes like PLI, Specs, and EMC 2.0, for developing the ecosystem, there’s a bigger need for technological advancement in the EMS sector,” Tandon said. Further, there’s a huge opportunity to add IoT to a wide range of products.

“With the projected global growth of IoT products to well over $5T and the Indian IoT market keeping pace, the opportunities are quite exciting for the combined entity,” the company said in a statement. Upon completing this merger, Syrma SGS Technologies will have 8 manufacturing facilities in India across Gurgaon, Manesar, Bawal, Baddi, Bangalore, Chennai, Bargur, and three design centers in Chennai, Gurgaon, and Stuttgart (Germany).