DOMS Industries IPO: The long-awaited initial public offering of DOMS Industries, a pencil maker and writing instrument company, opened on Wednesday and the offering is getting quite a response. Till 10.30 am on the first day of bidding, more than half of the Rs 1,200 crore IPO has already been subscribed. It has a subscription ratio of 0.56 and has received bids for 46,66,014 against 83,19,620 shares on offer.
The category meant for non-institutional investors was subscribed 0.73 times, while the quota for retail retail investors (RIIs) was subscribed 1.95 times.
They will remain open for public registration until Friday, December 15. The IPO price band of Rs 1,200 crore has been set at Rs 750-790 per share.
The IPO of DOMS is likely to take place on December 20 on both BSE and NSE, while the allotment of shares could be completed on December 18.
DOMS Industries IPO GMP today
According to market observers, unlisted shares of DOMS Industries continue to trade Rs 495 higher in the gray market compared to the issue price. The gray market premium of Rs 495 or GMP means that the gray market expects a listing gain of 62.66 percent from the public issue. The GMP is based on market sentiment and continues to change.
The 'gray market premium' indicates that investors are willing to pay more than the issue price.
DOMS Industries IPO: Should You Subscribe?
Rating 'Subscribe-Long Term', brokerage firm Anand Rathi said in his note, 'At the higher price band, the company values a price-to-earnings ratio of 46x, EV/Ebitda 15.33x with a market cap of Rs 47,937 million per post. issuance of shares and a return on equity of 28.39 percent.”
We believe the company's valuations are reasonably priced and recommend a 'Subscribe-Long Term' rating on the IPO, it added.
Another brokerage, KR Choksey, has also given a 'Subscribe' rating. “At the top end of the price range, the company's price-to-earnings ratio is 43.2x, which is higher than the industry average of 36.0x. We believe the premium is justified given the company's robust market share, established distribution network, capacity expansion and entry into new markets, and strong sales growth and profitability. We recommend a 'SUBSCRIBE' rating on the IPO of DOMS Industries Ltd.”
DOMS Industries IPO Details: Lot Size, Minimum Investment
The IPO includes a fresh issue of Rs 350 crore and an offer for sale (OFS) of Rs 850 crore. The price band of the IPO has been set at Rs 750 to Rs 790 per share.
For investors, the minimum lot size for the IPO is 18 shares. The minimum investment amount required by retail investors is Rs 14,220. The minimum investment for NII is 15 plots (270 shares) which amounts to Rs 2,13,300 and for NII it is 71 plots (1,278 shares) which amounts to Rs 10,09,620.
The issue will see Italian partner Fila (Fabbrica Italiana Lapis ed Affini), which owns 51 percent of the company with an investment of around Rs 300 crore since 2012, sell its stake for around Rs 800 crore.
The promoter family, led by Santosh Rasiklal Raveshia (Managing Director), Ketan Mansukhlal Rajani (Director), Sanjay Mansukhlal Rajani and Chandni Vijay Somaiya will sell their stake through a mix of OFS and fresh equity worth Rs 400 crore.
After the issue, the promoters will retain a 75 percent stake and Fila will remain the largest shareholder, said managing director Raveshia.