FILA-Backed Doms Industries Aims for Rs 1,200 Crore IPO; Files Draft Prospectus

23 Aug 2023 , 02:58 PM

Doms Industries, a stationery and art products manufacturer backed by the Italian company FILA, has submitted a draft red herring prospectus to the Securities and Exchange Board of India (SEBI) on August 22. The company intends to raise Rs 1,200 crore through its upcoming initial public offering.

The IPO plan comprises two components: a fresh issuance of shares valued at Rs 350 crore and an offer-for-sale (OFS) totaling Rs 850 crore by the company’s promoters.

The corporate promoter, FILA – Fabbrica Italiana Lapised Affini S.p.A., holds a 51% stake in the company and plans to divest shares worth Rs 800 crore through the OFS. On the other hand, domestic promoters Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani are set to sell shares worth Rs 25 crore each via the OFS route.

Doms Industries, based in Gujarat, which manufactures and markets products under the DOMS brand, is considering a pre-IPO placement of Rs 70 crore prior to submitting the red herring prospectus to the Registrar of Companies (ROC). If this placement materializes, the size of the fresh issue will be adjusted accordingly, as stated in the company’s prospectus.

The funds raised from the fresh issue will be allocated towards establishing a new manufacturing facility in Valsad, Gujarat. The aim is to expand production capabilities for a diverse range of writing instruments, watercolor pens, markers, and highlighters. Additionally, the funds will be used for general corporate purposes.

Leading merchant banks JM Financial, BNP Paribas, ICICI Securities, and IIFL Capital Services have been appointed to manage the issue.

Doms Industries, which operates in both the domestic market and more than 40 countries, claims a market share of 29% and 30% by value for its core products – pencils and mathematical instrument boxes, respectively – in FY23.

In the fiscal year ending March FY23, the company achieved a net profit of Rs 102.87 crore, marking a 500% surge from the previous year’s profit of Rs 17.14 crore. Furthermore, the company’s revenue from operations witnessed a substantial increase of 77.3%, reaching Rs 1,212 crore in FY23 compared to Rs 683.6 crore in the preceding financial year.