Divgi TorqTransfer Systems share sale via initial public offering (IPO) opened for subscription on Wednesday. The company is planning to raise Rs 412 crore from the IPO which will close on Friday, March 3. The IPO comprises of fresh issue of Rs 180 crore and an offer for sale worth Rs 232 crore.
The company is selling shares in price band of Rs 560-590 per share and retail investors can bid for minimum one lot of 25 shares up to maximum of 13 lots. At the upper end of the price band one lot of Divgi TorqTransfer Systems shares will cost Rs 14,750.
High net-worth individuals (HNIs) can bid for minimum of 14 lots of Divgi TorqTransfer Systems shares.
75 per cent shares in the IPO are reserved for qualified institutional buyers (QIBs), 15 per cent for HNIs and 10 per cent for retail investors.
Jitendra Bhaskar Divgi, Hirendra Bhaskar Divgi and Divgi Holdings Private Limited are the promoters of the company.
Divgi TorqTransfer Systems was incorporated in 1964 and is engaged in the business as an automotive component entity.
Divgi TorqTransfer is one of the leading players supplying transfer case systems to automotive original equipment makers (OEMs) in India and the largest supplier of transfer case systems to passenger vehicle manufacturers in India.
The company plans to utilise proceeds from fresh issue of IPO to fund capital expenditure requirements for the purchase of machineries for manufacturing facilities and for general corporate purposes.
Brokerage firm Nirmal Bang has a subscribe rating on the IPO. It says that the company is one of the very few suppliers in India having the capability to develop and provide system level transfer case, torque coupler, DCT solutions and transmission systems for EVs across a wide array of automotive vehicles and geographies.
"With OEMs entirely dependent on imports for DCT, Divgi TorqTransfer Systems will be the only manufacturer of DCT systems in India. Also recently, Divgi TorqTransfer Systems has been awarded a contract for supply of EV transmission systems. Further such wins could propel the company into a higher growth orbit. Divgi TorqTransfer Systems is being offered at reasonable valuations at 39.1 times FY22 earnings, considering the future growth opportunities. We recommend subscribing to the issue from long term perspective," Nirmal Bang said in a note.
