Doms Industries to Launch IPO on Dec 13 to Raise Rs 1,200 Crore

Doms Industries, a prominent stationery and art products manufacturing firm, is all set to make its market debut with an initial public offering (IPO) scheduled for subscription on December 13, 2023. The company aims to raise a total of Rs 1,200 crore through this IPO, making it the first company to adhere to the new T+3 timeline mandated by the Securities and Exchange Board of India (SEBI) for IPO launches, effective December 1, 2023.

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The IPO comprises a fresh issuance of shares worth Rs 350 crore by Doms Industries and an offer-for-sale (OFS) of shares worth Rs 850 crore by its promoters. This means that 70 percent of the raised funds will go to the selling shareholders.

The anchor book for the offer will open for a day on December 12, with the IPO closing for subscription on December 15.

FILA- Fabbrica Italiana Lapised Affini SpA, the corporate promoter, will offload shares worth Rs 800 crore in the OFS. The average cost of acquisition for these shares was Rs 101.53 each. Promoters Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani will also be selling Rs 25 crore worth of shares each in the OFS.

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Italian group FILA currently holds a 51 percent stake in the company, while Santosh Rasiklal Raveshia is the second-largest shareholder among the promoters, with a 17 percent stake. Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani both hold an 8.63 percent stake in the firm, while Chandni Vijay Somaiya, Sejal Santosh Raveshia, and Sheetal Hiren Parpani each hold a 4 percent stake, as per the red herring prospectus filed on December 2.

Doms Industries, which enjoys a significant market share of 29 percent and 30 percent in core products such as pencils and mathematical instrument boxes in FY23, plans to utilize the net fresh issue proceeds to establish a new manufacturing facility to expand production capabilities for a wide range of writing instruments, watercolor pens, markers, and highlighters. The remaining funds will be allocated for general corporate purposes.

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The IPO includes a reservation of up to Rs 5 crore worth of shares for the company’s employees. The IPO, excluding the employees’ portion, represents the net issue.

The Gujarat-based company primarily sells stationery and art products under its flagship brand DOMS. It is the second-largest player in India’s branded stationery and art products market, boasting a market share of 12 percent by value in FY23. Doms Industries has demonstrated robust financial performance in recent years, with net profit surging by 567.2 percent YoY to Rs 95.8 crore for the fiscal year ending in March FY23. During the same period, revenue from operations witnessed a significant increase of 77.3 percent YoY, reaching Rs 1,212 crore, while EBITDA (earnings before interest, tax, depreciation, and amortization) rose by 149 percent YoY to Rs 186.7 crore. EBITDA margin expanded sharply to 15.4 percent in FY23, up from 10.96 percent in FY22.

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For the six-month period ending in September FY24, the company reported a net profit of Rs 70.63 crore on revenue of Rs 761.8 crore.

Following the closure of the public issue on December 15, Doms Industries, in consultation with the Bombay Stock Exchange (BSE), will finalize the basis of allotment of IPO shares by December 18. Equity shares will be credited to the demat accounts of successful investors by December 19.

Doms Industries IPO

Trading in equity shares on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) is set to commence on December 20. JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities are serving as the merchant bankers to the issue, while Link Intime India is the registrar.

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