Mar 1, 2023
By: bhakti.makwana@timesinternet.in
Credit: Divgi TorqTransfer Systems
The initial public offering (IPO) of Pune-based automotive component manufacturer Divgi TorqTransfer Systems opens on March 1 and will close on March 3. The price band of the IPO is set at ₹560 - ₹590 per share.
Credit: Divgi TorqTransfer Systems
The company is looking to raise ₹412 crore at the upper end of the price band with a fresh issue of ₹180 crore along with an offer for sale (OFS) of up to 39.34 lakh equity shares to be sold by promoters and other shareholders.
Credit: Divgi TorqTransfer Systems
The company raised ₹185.45 crore from 12 anchor investors by allotting 31.43 lakh equity shares ahead of its IPO.
Credit: Divgi TorqTransfer Systems
The shares of the company are currently commanding a grey market premium, or GMP, of ₹60 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
Credit: Divgi TorqTransfer Systems
“From a valuation standpoint, based on the FY22 figures, the issue appears to be attractively priced at a P/E ratio of 35x when compared to its listed peers. However, the business has high customer concentration risk (91 percent of revenues comes from the top 5 customers and 54 percent is generated from 1 customer),” said Parul Sharma, research analyst at Samco Securities while recommending investors to ‘Subscribe’ to this IPO on favourable future growth potential in the long run.
Credit: Divgi TorqTransfer Systems
The company designs, develops, manufactures and supplies software-embedded electronically controlled transfer cases and torque couplers to customers like Tata Motors, Mahindra & Mahindra and others.
Credit: Divgi TorqTransfer Systems
It also manufactures and supplies engineered, turnkey solutions and components to automotive original equipment manufacturers (OEMs) across the globe including those in US, China, Korea and Russia. It says it has the capability to develop and provide transmission systems for electric vehicles.
Credit: Divgi TorqTransfer Systems
The company intends to use funds from the fresh issue of shares towards the purchase of equipment/machinery at its manufacturing facilities, and for general corporate purposes.
Credit: Divgi TorqTransfer Systems
Credit: Divgi TorqTransfer Systems
The company’s overseas sales are primarily dependent on two countries – China and Russia, which exposes it to risks of concentration. Both countries together contribute to over 77% of its overall export revenue.
Credit: Divgi TorqTransfer Systems
The company’s shares will be allotted to investors on March 9 and will be listed on stock exchanges on March 14 on the BSE and the NSE.
Credit: Divgi TorqTransfer Systems