DCX Systems IPO subscribed 69.79 times on last day

• The IPO of DCX Systems was subscribed 69.79 times as on the last day of bidding on November 2.
• The IPO received strong response from qualified institutional investors and retail investors.
• The grey market is indicating a premium of over ₹80 per share.

Bengaluru-based company DCX Systems, a manufacturer of electronic sub-systems and cable harnesses, closed its initial public offering (IPO) today on November 2.

On the last day, the issue has been subscribed by 69.79 times. The IPO has received bids for 101.27 crore crore equity shares against 1.45 crore equity shares on offer.

Investor category	Subscription
Qualified institutional buyers	84.32 times
Non-institutional investors	43.97 times
Retail	61.77 times
Overall	69.79 times

The shares of the company are currently commanding a grey market premium, or GMP, of ₹80 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

The company is primarily engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies; and kitting.

Analysts had recommended subscribing to the IPO considering reasonable valuations.

“Considering the favourable macros for the defence manufacturing sector and for the company, we feel the IPO is attractively priced. Thus we assign a ‘subscribe’ rating for the issue,” said Choice Broking.

Analysts at BP Equities say that the government’s ambition in the aerospace and defence sector will benefit the company.

“The Government of India aims to become a $5 billion export country by 2025 in the aerospace and defence goods sector thus providing private players like DCX Systems to play an important role in achieving this target,” said a report by BP Equities.

DCX’s order book increased to ₹2,369 crore in FY22 from ₹1,941 crore in FY20.

“The company has reported consistent financial performance over the years and is technology enabled with capacity to scale further without incurring too much capital expenditure. The company’s order book is growing with repeat orders from existing customers,” said a report by Arihant Capital Markets while recommending ‘Subscribe for long term’ to the IPO.

A significant portion of the company’s revenues are in US dollars due to exports. The rupee has depreciated significantly against the Dollar in the last one year.

DCX Systems plans to raise ₹400 crore through fresh issue of shares, along with an offer for sale of ₹100 crore by promoters and existing shareholders.

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