DOMS Industries IPO subscribed 4 times on Day 1 so far; retail portion booked 14.75x

The Rs 1,200 crore-initial public offering (IPO) of DOMS Industries saw a strong response from the investors during the first day of the bidding process, particularly by retail and non-institutional investors (NIIs). The issue had kicked-off for bidding on Wednesday, December 13.

The Gujarat-based DOMS Industries is selling its shares in the price band of Rs 750-790 apiece with a lot size of 18 shares and its multiples thereafter. The three-day bidding for the IPO will close for bidding on Friday, December 15. The block consists of fresh share sale of Rs 350 crore, and offer-for-sale of up to 10,759,493 equity shares.

According to the data, the investors made bids for 3,51,12,618 equity shares, or 3.97 times, compared to the 88,37,407 equity shares offered for the subscription by 3.00 pm on Wednesday, December 15. The bidding for the issue will continue for three days.

The allocation for retail investors was subscribed 14.76 times, while the portion reserved for non-institutional investors saw a subscription of  4.59 times. Employees allocation was booked 7.75 times. However, the quota set aside for qualified institutional bidders (QIBs) was yet to attract any bids as of the same time.

Also read: DOMS Industries IPO opens today: Should you subscribe to the issue?

DOMS Industries, incorporated in 2006, is a leading stationery and art product company, specializing in the design, development, manufacturing, and sale of a diverse range of products under the flagship brand, DOMS. It has a global presence in over 40 countries, with a robust multi-channel distribution network across the Americas, Africa, Asia Pacific, Europe, and the Middle East.

Doms Industries has a Leadership position in the Indian ‘stationery and art material’ industry with the widest range of products, driving rapid business growth with strong brand recall driven by high quality, innovative and differentiated products and a robust manufacturing infrastructure, with a focus on backward integration to drive efficiencies, said Anand Rathi Research.

At the upper price band, the company is valuing at P/E of 46 times, EV/EBITDA 15.33 times with a market cap of Rs 4,793.7 million post issue of equity shares and return on net worth of 28.39 per cent. We believe that valuations of the company are fairly priced and recommend a 'subscribe for long term' rating to the IPO, it added.

The IPO includes a provision to reserve shares worth Rs 5 crore for eligible employees, who will benefit from a Rs 75 discount per share. Qualified institutional bidders (QIBs) will have a reservation of not less than 75 per cent of the net issue, while non-institutional investors and retail investors will be allocated 15 per cent and 10 per cent of the net issue, respectively.

Revenue surged 72 per cent, EBITDA by 131 per cent, and PAT reversed from FY21's loss to profit in FY23. Projections indicate a promising 50 per cent profitability surge from FY23 to FY24, said Chola Securities. "At a projected FY24 PE ratio of 32 times, the company presents an attractive valuation proposition," it added with a subscribe rating.

DOMS Industries raised Rs 537.75 crore via anchor book on Tuesday.  JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities are the book running lead managers for the DOMS Industries IPO, with Link Intime India appointed for the issue. The company's shares are expected to be listed on both the BSE and NSE exchanges on December 20, Wednesday.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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