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Decoding Doms Industries IPO: A Comprehensive Guide

Introduction: DOMS Industries IPO

Doms Indus­tries, a promi­nent sta­tionery and art prod­uct man­u­fac­tur­er based in Gujarat, is all set to embark on its Ini­tial Pub­lic Offer­ing (IPO) jour­ney, sched­uled to kick off on Decem­ber 13, 2023. With a sub­stan­tial offer­ing of Rs 1,200 crore, the IPO includes a fresh issue of 44.3 lakh shares and an offer-for-sale of 1.07 crore shares. Notably, Doms will be mak­ing his­to­ry as the first com­pa­ny to adhere to the T+3 time­line for its stock mar­ket debut.

IPO Dates and Price Band

  • Dates: The sub­scrip­tion win­dow for the IPO is slat­ed to be open from Decem­ber 13 to Decem­ber 15, 2023.
  • Price Band: Investors keen on par­tic­i­pat­ing in the IPO can do so with­in a price range of Rs 750–790 per share.

Breaking Down the Offer

  • Fundrais­ing: Doms aims to raise an impres­sive Rs 1,200 crore through the IPO. The fundrais­ing struc­ture com­pris­es a fresh issue account­ing for Rs 350 crore and an offer-for-sale of Rs 800 crore.
  • Pro­mot­ers’ Share: Cor­po­rate pro­mot­er FILA- Fab­bri­ca Ital­iana Lapised Affi­ni SpA will offload shares worth Rs 800 crore. Addi­tion­al­ly, pro­mot­ers San­jay Man­sukhlal Rajani and Ketan Man­sukhlal Rajani will par­tic­i­pate by sell­ing shares in the offer.
  • Reser­va­tion: The net offer size is strate­gi­cal­ly reserved, with 75% allo­cat­ed for qual­i­fied insti­tu­tion­al buy­ers, 15% for high-net-worth indi­vid­u­als, and the remain­ing 10% for retail investors.

Objectives of the Issue

  • Uti­liza­tion of Funds: The IPO pro­ceeds are ear­marked to par­tial­ly finance the estab­lish­ment of a new man­u­fac­tur­ing facil­i­ty. This move is aimed at expand­ing pro­duc­tion capa­bil­i­ties for a diverse range of writ­ing instru­ments, water­col­or pens, mark­ers, and high­lighters. The resid­ual funds will be chan­neled towards gen­er­al cor­po­rate pur­pos­es.

Lot Size and Company Profile

  • Invest­ment Para­me­ters: Inter­est­ed investors can bid for a min­i­mum of 18 equi­ty shares, with sub­se­quent bids in mul­ti­ples of 18. This trans­lates to a min­i­mum invest­ment of Rs 13,500 for retail investors.
  • Com­pa­ny Overview: Doms Indus­tries stands as a key play­er in Indi­a’s brand­ed ‘sta­tionery and art’ prod­ucts mar­ket. Oper­at­ing 13 man­u­fac­tur­ing facil­i­ties in Umber­gaon, Gujarat, the com­pa­ny has estab­lished itself as one of the largest sta­tionery man­u­fac­tur­ing facil­i­ties in the coun­try.

Financial Performance

  • Mar­ket Share: Impres­sive­ly, Doms secured a 29% and 30% mar­ket share in core prod­ucts such as pen­cils and math­e­mat­i­cal instru­ment box­es in the fis­cal year 2022–23.
  • Finan­cial Met­rics: The com­pa­ny’s finan­cial per­for­mance reflects a sub­stan­tial YoY increase in net prof­it by 567.2%, reach­ing Rs 95.8 crore in FY23. Con­cur­rent­ly, rev­enue from oper­a­tions surged by 77.3% YoY to Rs 1,212 crore. In the six months end­ing Sep­tem­ber FY24, Doms record­ed a net prof­it of Rs 70.63 crore on rev­enue of Rs 761.8 crore.

Lead Managers and Risk Mitigation

  • Lead Man­agers: The book-run­ning lead man­agers for the IPO are rep­utable enti­ties such as JM Finan­cial, BNP Paribas, ICICI Secu­ri­ties, and IIFL Secu­ri­ties. Link Intime India serves as the reg­is­trar.
  • Risk Fac­tors: It is cru­cial for prospec­tive investors to con­sid­er the asso­ci­at­ed risks. Doms faces poten­tial chal­lenges, includ­ing depen­dence on wood­en pen­cil sales, ongo­ing lit­i­ga­tion, reliance on the FILA Group, and the absence of for­mal con­tracts with cer­tain sup­pli­ers.

Listing Date and IPO Application Process

  • List­ing Sched­ule: Investors can antic­i­pate the com­mence­ment of trad­ing for Doms shares on Decem­ber 20, fol­low­ing the IPO time­line.
  • Appli­ca­tion Require­ments: For seam­less par­tic­i­pa­tion, investors need a Demat account, trad­ing account, UPI ID, and a linked bank account. Eli­gi­bil­i­ty cri­te­ria encom­pass SEBI approval, pos­ses­sion of a PAN, and a linked Demat and trad­ing account.

Application Methods

  • Online Appli­ca­tion: Investors opt­ing for online par­tic­i­pa­tion can lever­age bro­kers’ plat­forms. The process involves login, IPO selec­tion, inputting quan­ti­ty and price, sub­mit­ting the UPI ID, and final approval.
  • Inter­net Bank­ing: Apply­ing through Inter­net Bank­ing is a straight­for­ward process. Investors log in to their accounts, access the ASBA tab, select the IPO, enter appli­cant details, and sub­mit the bid.
  • Offline Appli­ca­tion: For those pre­fer­ring tra­di­tion­al meth­ods, vis­it­ing the near­est branch to sub­mit an ASBA appli­ca­tion is a viable option. This involves fill­ing out the form and pro­vid­ing essen­tial KYC details.

Benefits of Online IPO Application

  • Time-Sav­ing: The online appli­ca­tion process elim­i­nates the need to vis­it phys­i­cal loca­tions, sav­ing valu­able time.
  • Con­ve­nience: Online appli­ca­tions are seam­less and trans­par­ent, pro­vid­ing investors with com­plete con­trol and vis­i­bil­i­ty over the process.
  • Inter­est Earn­ings: The appli­ca­tion amount, remain­ing in the investor’s account until the allot­ment date, con­tin­ues to earn inter­est.

Eligibility Criteria

  • Investor Types: Four cat­e­gories of investors—Qualified Insti­tu­tion­al Buy­er (QIB), Non-Insti­tu­tion­al Buy­er (NII), Retail Indi­vid­ual Investor, and Employees—have eli­gi­bil­i­ty to invest.
  • Account Require­ments: To apply for the IPO, investors must pos­sess a PAN, Demat account, trad­ing account, and a linked bank account.

Conclusion

In con­clu­sion, the Doms Indus­tries IPO emerges as a com­pelling invest­ment oppor­tu­ni­ty, sup­port­ed by the com­pa­ny’s robust mar­ket pres­ence, impres­sive finan­cial per­for­mance, and strate­gic expan­sion plans. Prospec­tive investors are urged to con­duct thor­ough due dili­gence, con­sid­er­ing the IPO details, finan­cial met­rics, and asso­ci­at­ed risks, before mak­ing informed invest­ment deci­sions. The IPO land­scape is dynam­ic, and investors must nav­i­gate it judi­cious­ly to cap­i­tal­ize on poten­tial growth oppor­tu­ni­ties.

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