Doms Industries, a leading manufacturer of stationery and art products, is gearing up to initiate its initial public offering (IPO) on December 13, with the objective of raising Rs 1,200 crore. This marks a significant move, as the company becomes the first to adhere to the T+3 timeline mandated by SEBI for IPO debuts, effective December 1, 2023. Let’s explore the distinct features of the DOMS industry’s IPO debut in the public market.
Doms Industries IPO: Key Highlights
- Doms Industries IPO set to launch on Dec 13, targeting a monumental Rs 1,200 crore.
- The IPO structure includes a fresh issue of Rs 350 crore and an OFS of Rs 850 crore by promoters.
- FILA, the corporate promoter, will offload shares worth Rs 800 crore in the OFS.
- Doms secures a significant market share, utilising IPO proceeds for product expansion and corporate needs.
- Closing on Dec 15, the IPO’s trading on NSE and BSE to commence from Dec 20.
Doms Industries Ltd IPO Schedule and Structure
The anchor book for the offering is scheduled to open on December 12, and the IPO will conclude on December 15.
Doms IPO comprises a fresh issue of shares valued at Rs 350 crore by Doms Industries Pvt Ltd. and an offer-for-sale (OFS) of shares amounting to Rs 850 crore by promoters. Notably, 70 percent of the funds generated will be directed towards the selling shareholders.
Exploring Doms IPO Details: Promoters and Offer-for-Sale (OFS)
In the OFS segment, FILA- Fabbrica Italiana Lapised Affini SpA, the corporate promoter, will offload shares worth Rs 800 crore, with an average acquisition cost of Rs 101.53 per share. Promoters Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani will individually sell shares worth Rs 25 crore in the OFS.
Shareholding Structure and Promoters’ Stakes
Italian group FILA currently holds a 51 percent stake in Doms Industries, while Santosh Rasiklal Raveshia stands as the second-largest promoter shareholder with a 17 percent stake. Other promoters, including Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani, hold an 8.63 percent stake each. Chandni Vijay Somaiya, Sejal Santosh Raveshia, and Sheetal Hiren Parpani individually possess a 4 percent stake, as per the red herring prospectus filed on December 2.
Doms Industries IPO: Utilization of Funds and Market Presence
Doms Industries, enjoying a 29-30 percent market share in core products like pencils and mathematical instrument boxes in FY23, plans to utilise the net fresh issue proceeds for a new manufacturing facility. This facility aims to expand production capabilities for various writing instruments, watercolour pens, markers, and highlighters. The remaining funds of Doms IPO will be allocated for general corporate purposes.
IPO Structure and Reservation Details
Doms IPO includes a reservation of up to Rs 5 crore worth of shares for company employees. The net issue is calculated after excluding the employee portion. The company has reserved 75 percent of the net offer size for QIBs- qualified institutional buyers, 15 percent for high-net-worth individuals, and the remaining 10 percent for retail investors.
Evaluation of the Financial Performance and Market Position of Doms Industries IPO
As the second-largest player in India’s branded stationery and art products market, Doms demonstrated robust financial performance. In FY23, net profit surged by 567.2 percent to Rs 95.8 crore, with revenue rising 77.3 percent YoY to Rs 1,212 crore. EBITDA also witnessed a 149 percent YoY increase to Rs 186.7 crore, leading to an expanded EBITDA margin of 15.4 percent in FY23.
Doms IPO Closing and Post-IPO Processes
Following the public issue closure on December 15, the company, in consultation with the BSE, will finalise the basis of the allotment of IPO shares by December 18. Equity shares will be credited to the demat accounts of successful investors by December 19. Trading in equity shares on the NSE and BSE is slated to commence on December 20.
IPO Management Team
The IPO is managed by merchant bankers, including JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities. Link Intime India is appointed as the registrar for the IPO.
Should You Invest in Doms IPO?
Considering the upcoming Doms Industries IPO, investors may weigh certain factors before deciding to invest. The company’s robust market presence, with a significant share in core products, coupled with a commendable financial performance in FY23, showcases a potential for growth. However, like any investment, there are inherent risks. It is advisable for investors to thoroughly review the red herring prospectus, understand the IPO structure, and assess their risk tolerance.
Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.