• Thu. Mar 23rd, 2023

The Right Mag

Voice of Unheard

Divgi Torq transfer System Ltd IPO update: Price range for IPO set between 560-590 Opens on 1st March

Feb 27, 2023

Automotive component firm Divgi Torqtransfer Systems Ltd, the first mainboard initial public offering in 2023 after a gap of nearly two months, has set a price band for its share sale at Rs 560-590 apiece.

The issue will open on March 1 for subscription and close on March 3. The anchor bidding will be on February 28.

On the upper band of the issue price, the firm will raise approximately Rs 412.12 crore through the issue and it is valued at Rs 1,624.39 crore. The firm said its basis of allotment will be on March 9 and credit of shares will be done on March 13. The stock will list on exchanges  on March 14.

Radiant Cash Management Services Ltd was the last IPO in December 2022 after which there were no public offerings amid raging market volatility. The issue opened on December 23 and closed on December 27 with a price band of Rs 94-99. It raised around Rs 388 crore from the IPO.

Divgi Torqtransfer Systems has cut its fresh issue size to Rs 180 crore from Rs 200 crore earlier announced. The offer-for-sale size has increased. Earlier, the promoters and existing shareholders intended to sell around 3.15 million shares, while now they plan to sell over 3.93 million shares via OFS.

    The OFS consists of up to 2.25 million shares by Oman India Joint Investment Fund II, up to 1.44 million shares by NRJN Family Trust, 49,430 shares by Bharat Bhalchandra Divgi, 40,460 shares by Sanjay Bhalchandra Divgi. Ashish Anant Divgi will sell around 1.04 lakh shares.

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

    The funds raised from the issuance will be allocated towards acquiring equipment and machinery for the company’s manufacturing facilities. The company operates three manufacturing and assembly plants in Karnataka and Maharashtra. Additionally, construction of a new facility is underway, with 80 percent of the construction completed. This new facility, in Shirwal, Maharashtra, is expected to be fully operational by fiscal year 2024.

    The firm possesses unique capabilities in India, being one of the few suppliers specialised in developing and delivering system-level solutions for transfer case, torque coupler, and DCT. Its reputation as a key player in the transfer case systems market is evidenced by its provision of solutions to various OEMs in India and its status as the primary supplier to passenger vehicle manufacturers in the country.

    Moving forward, the company intends to concentrate on meeting the needs of EV OEMs as part of its strategy to increase its market share both domestically and abroad.

    “We plan to upgrade our infrastructure across our manufacturing facilities. 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 its red herring prospectus.

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

    For FY22, the firm reported a 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.

    Leave a Reply Cancel reply