Divgi Torqtransfer IPO, the first public offering of 2023, opens March 1

IPO

Automotive component firm Divgi Torqtransfer Systems Ltd’s initial public offering, the first mainboard IPO of 2023, will open for subscription on March 1 and close on March 3.

Radiant Cash Management Services Ltd was the last mainboard IPO in December 2022 after which there were no public offerings amid market volatility.

Divgi Torqtransfer has cut the fresh issue size to Rs 180 crore from Rs 200 crore announced earlier but increased the offer for sale (OFS) size.

Earlier, the shareholders intended to sell around 3.15 million shares but have now increased the number to 3.93 million.

Oman India Joint Investment Fund II plans to sell up to 2.25 million shares, NRJN Family Trust up to 1.44 million shares, Bharat Bhalchandra Divgi 49,430 and Sanjay Bhalchandra Divgi 40,460. Ashish Anant Divgi will sell around 1.04 lakh shares, the red herring prospectus (RHP) said.

Oman India Joint Investment Fund II holds 21.71 percent stake in the company, while NRJN Family Trust has an 8.71 percent shareholding.

The anchor investors can bid on February 28.

The funds will be allocated towards acquiring equipment and machinery for the company's manufacturing facilities, the firm has said.

The company operates three manufacturing and assembly plants in Karnataka and Maharashtra. A new facility is coming up at Shirwal in Maharashtra and is expected to be fully operational by fiscal 2024.

The firm is one of the few suppliers specialising in developing and delivering system-level solutions for transfer case, torque coupler, and DCT, the RHP said.

The company intends to concentrate on meeting the needs of electric vehicle original equipment makers as part of its strategy to increase its market share both domestically and abroad.

“We seek to purchase equipment/ for manufacturing for maintaining high level of precision of gears and components required for the manufacture of EV transmissions and upgrade the facilities to meet the demand and to improve productivity to bring down manufacturing costs,” the company said in RHP prospectus.

Inga Ventures Pvt Ltd and Equirus Capital Pvt Ltd are the lead managers to the issue.

For FY22, the firm reported revenue of Rs 233.78 crore against Rs 186.58 crore a year ago. Net profit for the year stood at Rs 46.15 crore versus Rs 38.04 crore last year.