Doms Industries to launch IPO on Dec 13 to raise Rs 1,200 cr

Doms Industries IPO to open on December 13

Stationery and art products manufacturing firm Doms Industries is set to open its initial public offering for subscription on December 13 with the target to raise Rs 1,200 crore. This will be the first company to mandatorily debut on the bourses in the T+3 timeline as the Sebi directed companies launching IPOs with effect from December 1, 2023 to go for T+3 timeline, instead of the previous T+6 format.

The anchor book of the offer will open for a day on December 12, while the issue will close on December 15.

The IPO consists of a fresh issue of shares worth Rs 350 crore by Doms, and an offer-for-sale (OFS) of shares worth Rs 850 crore by promoters. This means 70 percent of funds will go to selling shareholders.

FILA- Fabbrica Italiana Lapised Affini SpA, the corporate promoter, will offload Rs 800 crore worth shares in the OFS, for whom the average cost of acquisition of these shares was Rs 101.53 each.

Promoters Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani will be selling Rs 25 crore worth of shares each in the OFS.

Italian group FILA owns 51 percent stake in the company, while Santosh Rasiklal Raveshia is the second largest shareholder among promoters with 17 percent stake.

Sanjay Mansukhlal Rajani, and Ketan Mansukhlal Rajani hold 8.63 percent stake each in the firm, while Chandni Vijay Somaiya, Sejal Santosh Raveshia, and Sheetal Hiren Parpani are holding 4 percent stake each, as per the red herring prospectus filed on December 2.

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Doms that enjoys 29 percent and 30 percent market share in core products such as pencils and mathematical instrument boxes in FY23 will make use of net fresh issue proceeds for new manufacturing facility to expand production capabilities for a wide range of writing instruments, water colour pens, markers and highlighters. And the remaining funds will be kept for general corporate purposes.

The offer includes a reservation of up to Rs 5 crore worth shares for employees of the company. The IPO excluding employees portion is the net issue.

The Gujarat-based company that sells stationery and art products primarily under its flagship brand DOMS, has reserved 75 percent of the net offer size for qualified institutional buyers, 15 percent for high networth individuals (non-institutional investors), and the remainder 10 percent for retail investors.

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Doms, the second largest player in India’s branded stationery and art products market with a market share of 12 percent by value in FY23, clocked healthy financial performance in the past years with the net profit growing 567.2 percent on-year to Rs 95.8 crore for year ended March FY23, with revenue from operations increasing 77.3 percent YoY to Rs 1,212 crore and EBITDA (earnings before interest, tax, depreciation and amortisation) rising 149% YoY to Rs 186.7 crore during the year. EBITDA margin expanded sharply to 15.4 percent in FY23, from 10.96 percent in FY22.

For the six-month period ended September FY24, the company recorded net profit of Rs 70.63 crore on revenue of Rs 761.8 crore.

After closing the public issue on December 15, the firm in consultation with the BSE will finalise the basis of allotment of IPO shares by December 18, while equity shares will be credited to demat accounts of successful investors by December 19.

The trading in equity shares on the NSE and BSE will commence with effect from December 20.

JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities are the merchant bankers to the issue, while Link Intime India is the registrar.