scorecardresearchDivgi TorqTransfer Systems IPO: Retail investors respond favourably on

Divgi TorqTransfer Systems IPO: Retail investors respond favourably on Day 1; 60% of portion booked

Updated: 02 Mar 2023, 01:26 PM IST
TL;DR.

  • The public issue that opened for subscription on Wednesday, March 1, will close on Friday, March 3. The company has fixed the price band at 560 to 590 per equity share for the proposed initial public offer.

Divgi TorqTransfer Systems Ltd opened for subscription on March 1

Divgi TorqTransfer Systems Ltd opened for subscription on March 1

The initial public offering (IPO) of Divgi TorqTransfer Systems Ltd was subscribed 12% on Day 1. The public issue that opened for subscription on Wednesday, March 1, will close on Friday, March 3.

The company has fixed the price band at 560 to 590 per equity share for the proposed initial public offer. Investors may submit bids for a minimum of 25 equity shares and in multiples thereof.

While 75% of the issue has been put aside for eligible qualified institutional investors, 15% is open to non-institutional bidders, and the remaining 10% is allocated for retail investors.

On Day 1 of subscription, retail buyers responded favourably by subscribing to 60% of the issue, the non-institutional bidders' portion was subscribed 6%, and qualified institutional investors' segment was subscribed by 4%.

On Tuesday, the company raised 185 crore from anchor investors. A total of 12 funds, including ICICI Prudential Mutual Fund (MF), Quant MF, Edelweiss MF, Motilal Oswal MF, Nippon India MF, Aditya Birla Sun Life Insurance Company, Aurigin Master Fund, and Bengal Finance and Investment Pvt Ltd, will receive 31.43 lakh equity shares at a price of 590 each.

Divgi TorqTransfer Systems had filed papers with the capital market regulator, Securities and Exchange Board of India (SEBI), on August 9, 2022.

The IPO comprises of a fresh issue of equity shares valued at 180 crore and an offer for sale (OFS) of 39.34 lakh shares by investors and other selling shareholders valued at 232 crore. Arun Ramdas Idgunji, Kishore Mangesh Kalbag, Bharat Bhalchandra Divgi, Sanjay Bhalchandra Divgi, Ashish Anant Divgi, NRJN Family Trust, and Oman India Joint Investment Fund II are a few of those who will sell the stock.

According to the Red Herring Prospectus (RHP), the company plans to utilise the net proceeds from the fresh issue to fund capital expenditure requirements and to manage general corporate purposes.

The book running lead managers (BRLM) of the issue are Inga Ventures Private Ltd and Equirus Capital Private Ltd. The registrar to the offer is Link Intime India Private Ltd. The equity shares are proposed to be listed on NSE and BSE.

Divgi TorqTransfer Systems is one of the top companies in India that provides transfer case systems to automotive original equipment manufacturers (OEMs). It is the sole manufacturer of torque couplers in India as well as the sole exporter of transfer cases to international manufacturers. Additionally, the company is capable of creating and offering EV transmission devices.

The company has a proven track record of expansion and financial success. Return on equity (ROE) and return on capital employed (ROCE) for the company were 13.57% and 29.47%, respectively, in FY2022. Almost all of the company's debt was paid off as of September 2022.

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First Published: 02 Mar 2023, 01:26 PM IST