DOMS IPO: The shares of DOMS Industries Limited, a pencil making company, will be made available for public purchase starting December 13th, 2023. People can apply to buy these shares between December 13th and 15th. The company has fixed a price between ₹750 to ₹790 for each share. DOMS aims to raise approximately ₹1200 crore through this initial public offering (IPO), .
The largest shareholder of DOMS, Fila of Italy, will be selling part of its 51% stake worth ₹800 crore via this IPO. The promoters, Sanjay Mansukhlal Rajani (a director) and Ketan Mansukhlal Rajani (whole-time director), will each sell shares worth ₹25 crore. After the IPO, Fila will continue to be the biggest shareholder. Together with the Italian partner, the promoters will have 75% ownership in the company.
Santosh Raveshia owns 17%, while Sanjay Rajani and Ketan Rajani each own 8.63%. Other shareholders include Chandni Vijay Somaiya, Sejal Santosh Raveshia and Sheetal Hiren Parpani with 4% each.
Interestingly, the small coastal town of Umbergaon in Gujarat’s Valsad district is known as the pencil hub of India. The two major players, Hindustan Pencils (40% market share) and DOMS (30% market share), are based out of this region.
DOMS Industries share price has increased sharply in the unofficial grey market following strong investor sentiment. Market experts said DOMS IPO grey market premium today is ₹470, up ₹300 from Tuesday’s ₹195. They attribute this to bullish stock market sentiment lifting all indices to lifetime highs. The positive market outlook is also rubbing off on the primary market, leading to high interest in upcoming IPOs like DOMS. Analysts believe the DOMS IPO next week may get robust response if the bull run sustains.
Key Details About DOMS IPO:
- DOMS aims to raise ₹1,200 crore via fresh issue of ₹350 crore and offer for sale of ₹850 crore shares. Price band is fixed at ₹750-790 per share. The DOMS IPO opens on December 13th for bidding till December 15th (Source:Groww.in). Listing is likely on December 20th under new T+3 norms, so allotment may happen on December 18th.
- Minimum bid is for 18 shares. The shares will subsequently list on BSE and NSE. Issue size is 25.03% of post-IPO equity. Of the proceeds, ₹280 crore will finance upcoming projects.
- ₹5 crore shares are reserved for employees at ₹75 discount. At least 75% allocation for qualified institutional buyers, up to 15% for high networth individuals and 10% for retail investors.
- Book running leads are JM Financial, BNP Paribas, ICICI Securities and IIFL Securities. Link Intime India is the registrar.
- The company has issued shares to promoters in the past between ₹5,242-20,735 per share. It also gave 150:1 bonus in July 2023. Average promoter acquisition cost is ₹0.03-0.07 and ₹101.53 per share.
- Post IPO, paid-up equity will increase from ₹56.25 crore to ₹60.68 crore. Maximum market cap at upper price band is ₹4,793.77 crore.
About DOMS Industries:
DOMS Industries is the fastest growing stationery and art materials company in India from 2020 to 2023 basis revenue growth.
The company designs, manufactures and sells a wide range of stationery and art products primarily under its key brand ‘DOMS’. Other brands are Amariz, Fixyfix and C3. Products are sold in India and over 45 countries as of September 2023.
DOMS is the 2nd largest player in India’s branded stationery market with 12%+ value share. Its focus on R&D, product engineering and in-house manufacturing coupled with pan-India and global distribution has enabled strong brand recall.
The product range spreads across 7 categories – scholastic stationery, scholastic art, paper stationery, kits & combos, office supplies, hobby & craft and fine arts. Presence across categories and price points has driven fastest growth for DOMS.
Wooden pencils is the largest revenue contributor, making up 31.66% and 32.49% of gross sales. To aid growth, 44 acres land adjacent to the Umbergaon factory has been recently acquired.
As of September 2023, DOMS has a widespread distribution network pan-India and in 45 global markets covering the Americas, Europe, Africa, Asia Pacific and Middle East. Domestically it sells via general trade, modern trade & e-commerce and to OEMs & institutions.
The general trade network has over 120 super-stockists, 4,000 distributors and a 500+ sales team covering 120,000+ retail touchpoints across 3,500+ towns and cities. DOMS products are also sold across modern trade platforms like supermarkets, hypermarkets, mini-markets and cash-and-carry stores. It is also available on several e-commerce platforms.
Conclusion:
The upcoming IPO of DOMS Industries provides an opportunity for investors to own shares in one of India’s fastest growing stationery companies. With robust financial growth, strong brand equity, an extensive distribution network and high promoter holding even post issue, DOMS seems well positioned to capitalize on the opportunities in the Indian stationery market. The high grey market premium indicates positive market sentiment towards the IPO.
