Doms Industries witnesses substantial demand in the grey market, with GMP soaring 80% in just 2 days.
The shares of DOMS Industries are experiencing significant demand in the grey market leading up to its initial public offering (IPO). The grey market premium (GMP) for the stationery and art products manufacturing company has surged by 80% in just two days, indicating robust investor interest in the upcoming issue.
As of Wednesday, December 6, shares of Gujarat-based DOMS Industries were trading at a premium of ₹360 in the unlisted market. This marks an increase from a Grey Market Premium (GMP) of ₹200 on December 4. The grey market operates unofficially, allowing shares to be traded well before the allotment and up until the listing day. Investors often monitor the GMP as an indicator of the potential listing price.
The public subscription for DOMS Industries’ IPO is scheduled to open on December 13 and will conclude on December 15.
DOMS Industries aims to raise ₹1,200 crores through its initial public offering (IPO). The public offer comprises a fresh equity of ₹350 crores by the company and an offer for sale (OFS) of ₹850 crores by the promoters. The OFS involves promoters Fabbrica Italiana Lapis, Sanjay Mansukhal Rajani, and Keta Mansukhal Rajani offloading shares, with the proceeds going to the selling shareholders.
The funds raised from the fresh issue will be utilized for establishing a new manufacturing facility to enhance production capabilities for various writing instruments, watercolor pens, markers, and highlighters. Additionally, the funds will be used for general corporate purposes. The IPO follows a book-building process, with 75% of the net offer allocated for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% for retail investors. The offer also includes a reservation of up to ₹5 crores worth of shares for company employees. The IPO, excluding the employee portion, constitutes the net issue.
DOMS Industries: A Strong Contender in Stationery Market
Financial Overview
DOMS Industries, holding the second-largest market share of 12% in India’s branded stationery and art products sector as of FY23, has demonstrated robust financial performance. In FY23, the company reported a noteworthy net profit of ₹96 crore, marking a substantial YoY revenue surge of 77% to ₹1,212 crore. The EBITDA witnessed remarkable growth, soaring by 149% YoY to ₹186.7 crore. This contributed to an expanded EBITDA margin, reaching 15.4% in FY23 from 10.96% in FY22.
Recent Performance
For the first half of FY24 ending in September, DOMS Industries sustained its financial momentum, achieving a net profit of ₹70.63 crore on revenues of ₹761.8 crore.
Business Operations
Headquartered in Gujarat, DOMS Industries is engaged in the design, development, manufacturing, and sale of a diverse range of stationery and art products. The company’s flagship brand, ‘Doms,’ has a significant presence in both the domestic market and more than 40 countries globally.
IPO Details and Listing
JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities are the appointed book-running lead managers for the IPO. Link Intime India will serve as the registrar. DOMS Industries is set to list on both the BSE and NSE, with trading scheduled to commence on December 20. Notably, the company will be the first to adhere to the T+3 timeline for listing, following SEBI’s directive to companies launching IPOs from December 1, 2023.
DOMS Industries’ strong market position, coupled with its impressive financials, positions it as a compelling player in the stationery and art products segment.
Disclaimer: This information is for reference purposes and does not constitute financial advice. Potential investors should conduct thorough research and consult with financial experts before making investment decisions.
