Automotive components maker Divgi TorqTransfer Systems will become the first company to launch its initial public offering (IPO) in 2023, when the issue will open for subscription from March 1 to March 3.
Divgi TorqTransfer IPO: Price band
The auto components maker has fixed a price band of Rs 560-590 per equity share and at the upper end is expected to fetch around Rs 412 crore from the public issue. The shares are expected to be listed on the exchanges on March 14.
Divgi TorqTransfer IPO: Offer size
OFS, as part of Oman India Joint Investment Fund will sell 22,50,000 shares, while Nilekani’s family trust NRJN Parivar will sell 14,41,441 shares.
The Nilekani Family Trust will make around 360 per cent return on its investment in the company when it will sell 14.4 lakh shares as part of the OFS. Nilekani’s trust acquired the shares at an average price of Rs 125.28, according to the prospectus. Considering the upper price band of Rs 590, Trust will take a domestic profit of around Rs 67 crore.
Other selling shareholders in the OFS include Bharat Bhalchandra Divgi, Sanjay Bhalchandra Divgi, Ashish Anant Divgi, Arun Ramdas Idgunji and Kishore Mangesh Kalbag.
Divgi TorqTransfer IPO: Lot Size
Investors can bid for a minimum of 25 shares and in multiples of 25 shares thereafter. Retail investors can invest a minimum of Rs 14,750 for a single lot and a maximum of Rs 1,91,750 for 13 lots at the higher end of the price band.
The company has reserved 75 per cent of the issue size for qualified institutional buyers, 15 per cent for non-institutional investors (high net worth individuals) and the remaining 10 per cent for retail investors.
Divgi TorqTransfer IPO: About the company
Divgi TorqTransfer develops and provides system-level transfer case, torque coupler and DCT solutions to automotive original equipment manufacturers through its three manufacturing and assembly facilities in India.
As per the CRISIL report, the company claims to be the largest supplier of transfer case systems to passenger vehicle manufacturers, the only player to manufacture and export transfer cases from India to global OEMs and the only manufacturer of torque couplers in India.
Divgi TorqTransfer IPO: GMP
According to market observers, shares of Divgi TorqTransfer Systems are earning at premium (GMP) of Rs 60 in gray market in previous sessions. The equity shares of the company are expected to be listed on BSE and NSE stock exchanges on March 14.
Should investors subscribe to the issue? Here’s what the experts say:
Parul Sharma, Research Analyst, Samco Securities, recommended investors to subscribe to the IPO citing sound financial health and favorable future growth potential in the long term.
“The company is one of the very few automotive components entities in India with the capability to develop and provide system-level transfer case, torque coupler, dual-clutch transmission solutions. The issue appears to be attractively priced at a P/E ratio of 35x compared to its listed peers,” said Sharma.
ICICI Direct said investors can subscribe to the issue for long-term gains as the trailing valuations underline its healthy financial position. “We like the company for its technical prowess in the transmission space and the incremental revenue streams it will generate in EV transmission as well as dual clutch transmission space,” the brokerage said.
Nirmal Bang Securities recommended investors to subscribe to the IPO, saying the company has the potential to manufacture various auto component products, which are very underserved in the market. “The IPO Given the future growth opportunities, reasonable valuations at 39.1x FY22 earnings are being offered,” it said.
Disclaimer:Disclaimer: The views and investment tips given by the experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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