Doms Industries, known for making pencils and writing tools, is set to launch its initial public offering (IPO) on Wednesday, December 13. Investors have until Friday, December 15, to subscribe to this highly anticipated IPO, which has garnered significant interest, as seen in its Grey Market Premium (GMP).
The IPO, valued at Rs 1,200 crore, will offer shares in the price range of Rs 750 to Rs 790 per share. It consists of a fresh issue of Rs 350 crore and an offer for sale (OFS) of Rs 850 crore.
Anticipated to debut on both the BSE and NSE on December 20, the allotment of shares is expected to be finalized by December 18.
Check DOMS Industries IPO GMP Today
Market observers have noticed that unlisted shares of DOMS Industries are consistently selling at a Rs 450 premium to their issue price in the gray market. This Rs 450 grey market premium (GMP) represents a 56.96 percent increase in the listing price from the public offering. It is critical to recognize that the GMP is vulnerable to market sentiment movements and so varies.
The phrase ‘gray market premium’ refers to investors’ readiness to pay a price for the shares that is greater than the designated issue price.
DOMS Industries IPO Details Lot Size of IPO, Minimum Investment and Price
The initial offering to public (IPO) has set its price range at Rs 750 to Rs 790 per share. Interested investors must apply for a minimum lot size of 18 shares. For retail investors, the minimum investment requirement stands at Rs 14,220. Meanwhile, Non-Institutional Investors (NII) have varying lot size requirements: 15 lots (equivalent to 270 shares) totaling Rs 2,13,300, and 71 lots (equivalent to 1,278 shares) amounting to Rs 10,09,620.
During this IPO, the Italian partner, Fila (Fabbrica Italiana Lapis ed Affini), holding a 51 percent stake in the company with an investment of approximately Rs 300 crore since 2012, will be selling its stake for about Rs 800 crore.
The promoter family, led by Santosh Rasiklal Raveshia (managing director), Ketan Mansukhlal Rajani (director), Sanjay Mansukhlal Rajani, and Chandni Vijay Somaiya, plan to sell their stake through a combination of Offer for Sale (OFS) and fresh equity, amounting to Rs 400 crore.
Post the IPO, the promoters will retain a 75 percent stake of value, while Fila will remain the largest shareholder in the company, affirmed Managing Director Raveshia.
The Doms Industries IPO: Is Subscribing a Good Idea?
Anand Rathi, a brokerage firm, has assigned the DOMS Industries IPO a ‘Subscribe-Long Term’ rating, noting, “At the upper price band, the company is valued at a P/E of 46x, EV/Ebitda 15.33x, with a post-issue market cap of Rs 47,937 million and a return on net worth of 28.39 percent.” They believe the company’s valuations are reasonable, and thus propose a ‘Subscribe-Long Term’ recommendation.
KR Choksey, another brokerage firm, has also issued a ‘Subscribe’ rating. “At the upper end of the price band, the company’s P/E stands at 43.2x, exceeding the industry average of 36.0x,” they write. We believe that this premium is warranted given the Company’s high market position, established distribution network, capacity expansions, forays into new markets, and strong revenue growth.
