Doms Industries IPO to Open for Subscription on December 13 to Raise ₹1,200 Crore
Doms Industries IPO
Doms Industries: A Comprehensive Exploration of its IPO, Strategic Initiatives, and Financial Landscape
Doms Industries, a distinguished player in the stationery and art products sector, is poised for a transformative leap with its upcoming Initial Public Offering (IPO) valued at Rs 1200 crore.
The IPO, scheduled to open on December 13, 2023, and conclude on December 15, marks a significant milestone for the company as it becomes the pioneer in debuting in the stock market under the revised T+3 timeline, a directive set by the Securities and Exchange Board of India (SEBI) effective from December 1, 2023, replacing the previous T+6 format.
Anticipation and interest in the financial community are heightened as the anchor book of the offer is set to open for one day on December 12.
IPO Structure and Fund Utilization:
The intricate structure of the IPO encompasses the issuance of new shares totaling Rs 350 crore by Doms Industries and an Offer for Sale (OFS) of Rs 850 crore from the promoters.
The OFS involves the corporate promoter FILA (Fabbrica Italiana Lapized Affini Spa) divesting shares worth Rs 800 crore, while individual promoters, Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani, plan to sell shares worth Rs 25 crore each in the OFS.
Ownership distribution paints a vivid picture of the corporate landscape. FILA, the Italian conglomerate, commands the majority stake with an imposing 51%.
Following closely, Santosh Rasiklal Raveshia, among the individual promoters, holds the second-largest stake with a substantial 17%.
Meanwhile, Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani each possess an 8.63% stake in the firm.
The trio of Chandni Vijay Somaiya, Sejal Santosh Raveshia, and Sheetal Hiren Parpani collectively holds a 4% stake, as disclosed in the red herring prospectus filed on December 2.
Market Presence and Strategic Use of Funds:
Doms Industries has not only established itself as a key player but has also demonstrated a robust market presence.
It secured a commendable 29% market share in pencils and an impressive 30% market share in mathematical instrument boxes during the financial year 2022-2023.
The strategic utilization of funds from the IPO, particularly those generated by issuing fresh shares, is earmarked for a pivotal purpose.
Doms Industries plans to leverage these funds for the establishment of a new manufacturing facility, a strategic move aimed at bolstering production capacity for writing instruments, watercolor pens, markers, and highlighters.
Additionally, the proceeds will be channeled towards meeting general corporate objectives, underlining the company’s commitment to sustained growth and innovation.
Reserved Share Details and Investor Allocation:
A key feature of the IPO is the reserved share segment, with shares amounting to Rs 5 crore set aside for the dedicated and hardworking employees of Doms Industries.
The remaining portion constitutes the net issue, with a meticulously planned allocation strategy. Notably, 75% of the net issue is reserved for qualified institutional buyers, 15% for high net worth individuals (non-institutional investors), and the remaining 10% for retail investors.
This strategic allocation aims to ensure a diverse investor base and broad participation in the IPO, aligning with regulatory guidelines and fostering a healthy ecosystem of stakeholders.
Timeline and Key Dates:
The IPO process unfolds with a well-defined timeline. Following the closure of the IPO on December 15, the allotment of shares is anticipated on December 18.
The much-anticipated listing of Doms Industries shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) is scheduled for December 20.
The IPO journey is meticulously shepherded by esteemed merchant bankers, including JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities.
The critical role of registrar has been entrusted to Link Intime India, ensuring a seamless and efficient process.
Financial Performance and Profitability:
A closer look at the financial landscape of Doms Industries reveals impressive figures, underscoring the company’s financial robustness. In the fiscal year 2022-2023, the net profit witnessed a staggering year-on-year surge of 567.2%, reaching an impressive Rs 95.8 crore.
This substantial growth is mirrored in other financial metrics, with revenue from operations experiencing a robust 77.3% increase year-on-year, reaching an admirable Rs 1,212 crore.
Equally noteworthy is the EBITDA (earnings before interest, tax, depreciation, and amortization), which surged by 149% year-on-year, reaching a substantial Rs 186.7 crore.
For the period spanning April to September 2023, Doms Industries reported a revenue of Rs 761.8 crore and a net profit of Rs 70.63 crore, underscoring the sustained momentum and profitability of the company.
These figures not only reflect the company’s adeptness in navigating market dynamics but also its ability to capitalize on growth opportunities.
Strategic Initiatives and Future Growth Prospects:
The IPO is not just a financial event for Doms Industries; it serves as a strategic initiative paving the way for future growth.
The decision to establish a new manufacturing facility aligns with the company’s forward-looking approach.
The facility’s focus on increasing production capacity for writing instruments, watercolor pens, markers, and highlighters is indicative of Doms Industries’ commitment to meeting market demands and staying ahead in the competitive landscape.
Furthermore, the infusion of funds into general corporate objectives signifies a holistic approach to business development.
Whether it be research and development, expanding distribution networks, or investing in cutting-edge technologies, these general corporate objectives are integral to sustaining the company’s competitive edge and fostering long-term success.
Industry Dynamics and Competitive Landscape:
Understanding the dynamics of the stationery and art products sector is crucial to evaluating Doms Industries’ positioning and potential.
The company’s notable market shares in pencils and mathematical instrument boxes underscore its established presence.
However, the industry is not without challenges, including changing consumer preferences, technological advancements, and the need for sustainability.
Doms Industries’ ability to adapt to these challenges and leverage its market position will play a pivotal role in maintaining and enhancing its competitive edge.
The IPO funds, particularly those directed towards the new manufacturing facility, will likely play a crucial role in this regard, allowing the company to stay agile and innovative.
Investor Sentiment and Market Response:
As the IPO journey unfolds, investor sentiment and market response become key indicators of the company’s perceived value.
The reserved share segment for employees and the strategic allocation for different investor categories are designed to ensure a broad and inclusive participation, fostering a sense of ownership among various stakeholders.
The choice of esteemed merchant bankers and the registrar adds to the credibility of the IPO process, instilling confidence in investors.
The response during the anchor book opening on December 12 will provide an initial glimpse into institutional investors’ interest, setting the tone for the broader market response.
Final Thoughts:
In conclusion, Doms Industries’ IPO marks not just a financial event but a strategic move that aligns with the company’s growth trajectory.
The intricate details of the IPO structure, ownership distribution, and strategic fund utilization paint a comprehensive picture of the company’s approach to market dynamics.
The robust financial performance further adds to the company’s appeal, substantiating its position as a noteworthy player in the sector.
As the IPO journey unfolds, market participants, investors, and industry observers eagerly await the listing on December 20, marking a new chapter in Doms Industries’ journey.
The infusion of funds, strategic initiatives, and the company’s ability to navigate industry challenges will be closely monitored.
In a dynamic market landscape, Doms Industries’ IPO stands as a testament to its commitment to growth, innovation, and creating value for its stakeholders.
