The upcoming initial public offering (IPO) of Bengaluru-based DCX Systems would open for subscription on October 31 and conclude on November 2. The company has reduced the size of its fresh issue of equity shares to Rs 400 crore from Rs 500 crore planned earlier. The initial share sale also comprises an offer-for-sale (OFS) of equity shares worth up to Rs 100 crore by promoters — NCBG Holdings Inc and VNG Technology.
IPO price band
DCX Systems has fixed a price band of Rs 197-Rs 207 per equity share. Investors can bid for a minimum of 72 equity shares and in multiples of 72 equity shares thereafter.
“DCX Systems is a well-known participant in the defense and aerospace industry for the production of electronic sub-systems and cable harnesses. The company’s financial performance has been consistent. The issue looks reasonably priced at a PE (Price-earnings) multiple of about 30 times (post-fresh issue) based on 2021-22 (FY22) figures. Due to the government’s efforts to boost domestic manufacturing and export of defence equipment, the sector-specific stocks have remained popular lately,” Manan Doshi of UnlistedArena.com told Business Today.
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Grey market premium
Market participants said DCX Systems IPO grey market premium (GMP) today is at Rs 80. It implies that the grey market is expecting the lender to list around Rs 287 (Rs 207 + Rs 80), which is more than 38 per cent higher than the IPO’s upper band price of Rs 207 per equity share.
According to the company, 75 per cent of the issue has been reserved for qualified institutional investors, 15 per cent for non-institutional investors, and the remaining 10 per cent for retail investors.
The company aims to utilise the net proceeds from the fresh issue towards debt payment, funding working capital requirements and investment in its wholly-owned subsidiary Raneal Advanced Systems.
The company is primarily engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies and is also involved in kitting.
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On the financial front, DCX Systems’ revenue from operations grew at a CAGR (Compounded annual growth rate) of 56.64 per cent from Rs 449 crore in fiscal 2020 to Rs 1,102 crore in fiscal 2022.
The company’s order book has increased from Rs 1,941 crore as of March 31, 2020, to Rs 2,369 crore, as of March 31, 2022.
Edelweiss Financial Services, Axis Capital and Saffron Capital Advisors are the book-running lead managers to the issue. The equity shares are proposed to be listed on both the bourses, BSE and NSE.
(With inputs from PTI)
