Unlisted shares of DOMS Industries are trading Rs 500 higher in the grey market, suggesting a 63.29 per cent listing gain from the public issue
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DOMS Industries IPO: The initial public offering of DOMS Industries, a pencil maker and writing instruments company, got a decent response on the first day of bidding on Wednesday with 5.72 times subscription. Now, on the second day of bidding on Thursday, till 10:55 am, the Rs 1,200-crore IPO was subscribed 7.69 times, receiving bids for 6,39,64,620 as against 83,19,620 shares on offer.
The category meant for non-institutional investors received 11.07 times subscription, while the quota for retail individual investors (RIIs) got subscribed 24.95 times. The qualified institutional buyers category has been subscribed 0.07 times.
The DOMS Industries IPO was opened on Wednesday, December 13, and will remain open for public subscription till Friday, December 15. The price band of the Rs 1,200-crore IPO has been fixed at Rs 750-790 per share.
The IPO was fully subscribed within hours on its opening on Wednesday.
The DOMS IPO will likely be on both BSE and NSE on December 20, while the share allotment might be finalised on December 18.
DOMS Industries IPO GMP Today
According to market observers, unlisted shares of DOMS Industries are currently trading Rs 500 higher in the grey market as compared with its issue price. The Rs 500 grey market premium or GMP means the grey market is expecting a 63.29 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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DOMS Industries IPO: Should You Subscribe?
Giving a ‘Subscribe-Long Term’ rating, brokerage firm Anand Rathi in its note said, “At the upper price band, company is valuing at P/E of 46x, EV/ Ebitda 15.33x with a market cap of Rs 47,937 million post issue of equity shares and return on net worth of 28.39 per cent.”
We believe that the valuation of the company is fairly priced and recommend a ‘Subscribe-Long Term’ rating to the IPO, it added.
Another brokerage KR Choksey has also given a ‘Subscribe’ rating. “At the upper end of the price band, the company’s P/E is 43.2x which is higher than the industry average of 36.0x. We believe the premium is justified given the Company’s robust market share, established distribution network, expansion of capacities and venturing into new markets, and strong revenue growth and profitability. We recommend a ‘SUBSCRIBE’ rating on the IPO of DOMS Industries Ltd.”
DOMS Industries IPO Details: Lot Size, Minimum Investment
The IPO will comprise a fresh issue of Rs 350 crore and an offer for sale (OFS) of Rs 850 crore. The price band of the IPO has been fixed at Rs 750 to Rs 790 per share.
For investors, the minimum lot size to apply for the IPO is 18 shares. The minimum amount of investment required by retail investors is Rs 14,220. The minimum lot size investment for NII is 15 lots (270 shares), amounting to Rs 2,13,300, and for NII, it is 71 lots (1,278 shares), amounting to Rs 10,09,620.
The issue will see its Italian partner Fila (Fabbrica Italiana Lapis ed Affini), which owns 51 per cent in the firm with an investment of about Rs 300 crore since 2012, 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 will sell their stake through a mix of OFS and fresh equity worth Rs 400 crore.
After the issue, the promoters will continue to hold 75 per cent and Fila will remain the single-largest shareholder, Managing Director Raveshia said.
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Funds raised through the fresh issue would be used for setting up a new manufacturing facility to expand the company’s production capabilities for a range of writing instruments, watercolour pens, markers and highlighters as well as for general corporate purposes. JM Financial, BNP Paribas, ICICI Securities and IIFL Securities are the managers to the offer.
