NEW DELHI: The initial public offer (IPO) of DOMS Industries sailed through within an hour on the first day of the bidding process on Wednesday amid strong demand from retail and NII category investors.
At 11:06 am, the public issue was subscribed 1.09 times. The retail category was subscribed 4.08 times, while the NII portion garnered 1.18 times bids. There were no bids from qualified institutional buyers so far.
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Analysts advised investors to subscribe to the issue given reasonable valuations and strong brand presence, which is likely to bring sustainable growth in the long run.
“We believe DOMS IPO gives investors an opportunity to invest in a leading player in the Indian stationery and art material industry. In the longer term, we like the company’s commitment towards product quality, innovation and pricing strategy in the segment with a high growth target audience,” said Rajan Shinde, Research Analyst, Mehta Equities.
DOMS IPO comprises a fresh equity issue worth Rs 350 crore along with an offer for sale (OFS) of Rs 850 crore. Under the OFS, promoters Fabbrica Italiana Lapis, Sanjay Mansukhal Rajani and Keta Mansukhal Rajani will offload shares.
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The price band of this public issue is fixed at Rs 750-790. At the upper end, the company plans to raise Rs 1,200 crore. Investors can bid for 18 shares in one lot and in multiples thereafter.
About 75% of the offer is reserved for qualified institutional buyers, 15% for non-institutional investors and 10% for retail investors.
At the upper price band, the company is valued at a P/E of 46x EV/EBITDA with a market cap of Rs 4793 crore post issue. Analysts believe the IPO is fairly priced.
“DOMS Industries has a leadership position in the Indian stationery and art material industry with a wide range of products driving rapid business growth. The valuations are reasonable and hence recommend a subscribe-long term to the IPO,” said Anand Rathi.
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“DOMS has demonstrated impressive financial growth in recent years, solidifying its market position and future potential. Despite the fully priced valuation of 43x P/E, we recommend subscribing to the Doms IPO based on its strong brand, consistent growth, and promising market outlook,” said Swastika Investmart.
Net proceeds will be utilised for the part funding of the cost of establishing a new manufacturing facility and general corporate purposes.
DOMS Industries designs, develops, manufactures, and sells a wide range of ‘stationery and art’ products, primarily under its flagship brand ‘Doms’, in the domestic market as well as in over 40 countries internationally.
The company’s revenue from operations fell 41% year-on-year to Rs 403 crore in the financial year 2023. It had clocked a loss of Rs 6 crore in the same period as against a profit a year ago.
JM Financial, BNP Paribas, ICICI Securities and IIFL Securities are the bankers for the issue.
