DOMS Industries IPO opens Wednesday: What GMP signals ahead of subscription?

bharatkashyap6969
December 12, 2023
Categories: Blog
Tags: DOMS Industries ipo, DOMS Industries ipo gmp, doms industries ipo gmp today, doms ipo, doms ipo gmp, doms ipo gmp today

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The initial public offering (IPO) of DOMS Industries will open for subscription on Wednesday, December 13. The company has fixed a price band of ₹750-790 per share for its offer.

Ahead of the issue opening, the company continues to command a healthy premium in the grey market. Last heard, shares of DOMS Industries were trading at a premium of ₹450 in the unlisted market.

The grey market is an unofficial ecosystem where shares start trading much before the allotment and until the listing day. Most investors track the GMP to get an idea of the listing price.

The issue, which closes on December 15, comprises a fresh equity of ₹350 crore by the company and an offer for sale (OFS) of ₹850 crore by the promoters.

Under the OFS, promoters Fabbrica Italiana Lapis, Sanjay Mansukhal Rajani and Keta Mansukhal Rajani will offload shares. The proceeds from the OFS will go to the selling shareholders.

At the upper end of the price band, the company intends to raise ₹1,200 crore via its initial stake sale. Investors can bid for 18 shares in one lot and multiples thereafter.

The company will use the capital raised from the fresh issue towards funding of the cost of establishing a new manufacturing facility to expand the company’s production capabilities for a wide range of writing instruments, water colour pens, markers and highlighters, along with for general corporate purposes.

The IPO is being made through the book-building process, where 75% of the net offer is reserved for qualified institutional buyers, 15% for non-institutional investors and the remaining 10% for retail investors.

The IPO includes a reservation of up to ₹5 crore worth shares for employees of the company. The IPO excluding employees portion is the net issue.

Company description

DOMS Industries designs, develops, manufactures, and sells a wide range of

stationery and art products, primarily under their flagship brand ‘DOMS’, in the domestic market as well as in over 45 countries internationally, as of September 30, 2023.

They are touted to be the second largest player in India’s branded ‘stationery and art’ products market, with a market share of 12% by value, as of fiscal 2023.

The company reported a net profit of ₹96 crore for the year ended March FY23, with revenue surging 77% year-on-year to ₹1,212 crore. Its EBITDA or earnings before interest, tax, depreciation and amortisation grew 149% year-on-year to ₹186.7 crore during the year. EBITDA margin expanded sharply to 15.4% in FY23 as against 10.96% in FY22.

For the six-month period ended September FY24, the firm posted a net profit of ₹70.63 crore on revenue of ₹761.8 crore.

JM Financial, BNP Paribas, ICICI Securities and IIFL Securities are the book-running lead managers to the IPO, while Link Intime India is the registrar. The equity shares of the company will be listed on the bourses on December 20.

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