Doms Industries IPO: Issue to launch on December 13 to raise Rs 1200 crore

4 Dec 2023 , 09:36 AM

In a significant move in the financial landscape, Doms Industries, a leading stationery and art products manufacturing firm, is gearing up to launch its Initial Public Offering (IPO) on December 13, aiming to raise an impressive Rs 1,200 crore. What makes this IPO noteworthy is its adherence to the revised T+3 timeline mandated by SEBI for companies debuting on the bourses from December 1, 2023, onwards, a shift from the previous T+6 format.

Offer Details and Fund Allocation: Doms Industries’ IPO comprises a fresh issue of shares amounting to Rs 350 crore and an Offer-for-Sale (OFS) of shares worth Rs 850 crore by promoters. Notably, 70 percent of the funds will be directed towards selling shareholders.

The anchor book will open on December 12 for a day, and the IPO will close on December 15. FILA- Fabbrica Italiana Lapised Affini SpA, the corporate promoter, will offload Rs 800 crore worth of shares in the OFS. Additionally, promoters Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani will each sell Rs 25 crore worth of shares in the OFS.

Stakeholder Details: FILA holds a majority stake of 51 percent in the company, and Santosh Rasiklal Raveshia is the second-largest promoter with a 17 percent stake. Other key stakeholders include Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani, each holding an 8.63 percent stake, and Chandni Vijay Somaiya, Sejal Santosh Raveshia, and Sheetal Hiren Parpani, holding 4 percent each.

Utilization of Funds: Doms Industries, boasting a substantial 29 percent and 30 percent market share in pencils and mathematical instrument boxes, respectively, in FY23, plans to utilize the net fresh issue proceeds for a new manufacturing facility. This strategic move aims to expand production capabilities for a diverse range of writing instruments, watercolor pens, markers, and highlighters. The remaining funds will be allocated for general corporate purposes.

IPO Structure and Reservation: The IPO includes a reserved portion of up to Rs 5 crore worth of shares for company employees, with the remaining portion constituting the net issue. Qualified Institutional Buyers (QIBs) are allotted 75 percent, High Net Worth Individuals (HNIs) receive 15 percent, and retail investors secure the remaining 10 percent of the net offer size.

Financial Performance: As the second-largest player in India’s branded stationery and art products market with a 12 percent market share by value in FY23, Doms Industries has showcased robust financial performance. The net profit surged by an impressive 567.2 percent YoY to Rs 95.8 crore for FY23. During the same period, revenue from operations recorded a significant YoY increase of 77.3 percent to Rs 1,212 crore, and EBITDA rose by 149 percent to Rs 186.7 crore. The EBITDA margin expanded sharply to 15.4 percent in FY23 from 10.96 percent in FY22.

For the six-month period ending September FY24, the company maintained its strong financial stance, reporting a net profit of Rs 70.63 crore on revenue totaling Rs 761.8 crore.

Post-IPO Timeline: Upon the closure of the public issue on December 15, the basis of allotment of IPO shares will be finalized in consultation with the BSE by December 18. Equity shares will then be credited to the demat accounts of successful investors by December 19. Trading in equity shares on the NSE and BSE is set to commence on December 20.

Merchant Bankers and Registrar: The IPO is spearheaded by reputed merchant bankers, including JM Financial, BNP Paribas, ICICI Securities, and IIFL Capital Services. Link Intime India serves as the registrar for this milestone event.