Doms Industries IPO: 10 things to know before subscribing to Rs 1,200 crore issue

Stationery and art product maker DOMS Industries is pencilling in slightly slower revenue growth of 20-25 percent for the current financial year, which it expects to normalise at roughly around Rs 1,500 crore.

Gujarat-based Doms Industries IPO is set to open on December 13. The Rs 1,200 crore public offer consists of a fresh issue of 44.3 lakh shares and an offer-for-sale of 1.07 crore shares.  The anchor book will open for a day on December 12. Stationery and art product manufacturer, Doms, will be the first company to mandatorily debut on the bourses in the T+3 timeline.

Here are 10 key things to know before subscribing to the offer:

1) IPO Dates

The IPO will open for subscription on December 13, 2023, and close on December 15, 2023.

2) Price Band

The price band for the issue has been fixed at Rs 750-790 per share.

3) Offer Details

The company plans to raise Rs 1,200 crore via IPO. The offer consists of a fresh issue of 44.3 lakh shares worth Rs 350 crore and an offer-for-sale of 1.07 crore shares. FILA- Fabbrica Italiana Lapised Affini SpA, the corporate promoter, will offload Rs 800 crore worth of shares in the OFS. 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. The company has reserved 75 percent of the net offer size for qualified institutional buyers, 15 percent for high-net-worth individuals (non-institutional investors), and the remainder 10 percent for retail investors.

Also Read: Doms Industries sets IPO price band at Rs 750-790, issue opens on Dec 13

4) Objectives of Issue

Doms will use the net proceeds to partly finance the cost of establishing a new manufacturing facility to expand its production capabilities for a wide range of writing instruments, watercolour pens, markers and highlighters and the remaining fund will be used for general corporate purposes.

5) Lot Size 

Investors can bid for a minimum of 18 equity shares and multiples of 18 after that. Hence the minimum investment by retail investors would be Rs 13,500 (18 (Lot size) x 750 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,220.

6) Company Profile

Doms Industries design, develop, manufacture, and sell a wide range of stationery and art products in the domestic market as well as in over 45 countries. The company is the second largest player in India’s branded ‘stationery and art’ products market. Doms operates 13 manufacturing facilities across Umbergaon, Gujarat, spread over approximately 34 acres of land and is one of the largest stationery manufacturing facilities in India.

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7) Financials

Doms had 29 percent and 30 percent market share in core products such as pencils and mathematical instrument boxes in FY23. The net profit increased by 567.2 percent on-year to Rs 95.8 crore for the year ended March FY23 and revenue from operations jumped 77.3 percent YoY to Rs 1,212 crore during the same period, while in six months period ending in September FY24, it recorded a net profit of Rs 70.63 crore on revenue of Rs 761.8 crore.

8) Lead Managers

The book-running lead managers to the issue are JM Financial, BNP Paribas, ICICI Securities and IIFL Securities while Link Intime India is the registrar.

Also Read: Inox India sets IPO price band at Rs 627-660, aims to raise Rs 1,459 crore from OFS

9) Risks

(i) Doms generated a significant portion of sales from wooden pencils, which contributed 31.66 percent to total gross product sales in FY23. Any decline in the sales of wooden pencils could hurt the business.

(ii) There is an outstanding civil litigation against Doms by Kokuyo Camlin. Any adverse decision in this proceeding could impact the reputation, business and financial condition.

(iii) Doms is dependent on the FILA Group for its business operations and in particular for its export sales. In the event FILA ceases to be a promoter, it may adversely impact its R&D and export capabilities.

(iv) The company has not entered into any formal contracts or exclusive arrangements with its suppliers from whom they procure materials. Further, Doms is dependent on certain limited suppliers for some of their raw materials.

10) Listing Date

The trading of Doms shares on the bourses will commence with effect from December 20, as per the IPO schedule.