{"id":19949,"date":"2023-12-12T16:35:32","date_gmt":"2023-12-12T11:05:32","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=19949"},"modified":"2023-12-13T10:12:28","modified_gmt":"2023-12-13T04:42:28","slug":"doms-industries-ipo-review","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/doms-industries-ipo-review\/","title":{"rendered":"DOMS Industries IPO Review: Avoid, as growth is already priced in"},"content":{"rendered":"
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DOMS Industries Limited IPO Details: <\/strong><\/h2>\n

Estimated Pre-listing Market Cap: <\/strong>~4,793Cr<\/p>\n

IPO Date:<\/strong> 13th<\/sup> December to 15th<\/sup> December<\/p>\n

Total shares:<\/strong> ~6 Cr<\/p>\n

Price band:<\/strong> Rs. 750 – Rs. 790 per share<\/p>\n

IPO Issue Size:<\/strong> ~ Rs. 1,200 Cr<\/p>\n

Lot Size:<\/strong> 18 shares and multiples thereof<\/p>\n

Purpose of Issue:<\/strong> Offer for Sale by Promoters<\/p>\n

Recommendation:<\/strong> Avoid, as growth is already priced in<\/strong><\/p>\n<\/div>\n

About DOMS Industries Limited:<\/strong><\/h2>\n

Doms Industries<\/a> engages in the design, development, manufacturing, and sale of a diverse range of stationery and art products. These products are primarily marketed under the flagship brand ‘DOMS’ and are distributed both domestically and internationally (20%+ revenue share), spanning over 45 countries. In India’s branded stationery and art products market, Doms holds the position of the second-largest player, boasting a market share of ~12% by value<\/u> (as of FY23). The company’s success can be attributed to its dedicated focus on R&D, product engineering, and vertically integrated manufacturing operations.<\/p>\n

In 2012, the company teamed up with Fabbrica Italiana Lapis ed Affini S.p.A. F.I.L.A. (current promoter)<\/u>, an Italian multinational in art and stationery. FILA, a big player with USD 0.84 bn in revenue helped the company reach global markets and boost research and tech capabilities. This partnership expanded the company’s presence in the US and Europe, promoting the ‘DOMS’ brand worldwide. Also, they have an exclusive deal with FILA for distributing and marketing their products in India, Nepal, Bhutan, Sri Lanka, Bangladesh, Myanmar, and the Maldives.<\/p>\n

Key products:<\/strong><\/h3>\n

\"key<\/a><\/p>\n

Category-wise products and revenue breakup<\/strong><\/h3>\n

\"Category<\/a><\/p>\n

\"product<\/a><\/p>\n

Acquisitions to enter new segments:<\/strong><\/h3>\n

In FY16, Doms Industries bought a 49% share in Pioneer Stationery Pvt Ltd for Rs. 2.1 crores to expand into paper stationery. Later, the stake was increased to 51%. In FY17, they acquired a 35% share in Uniwrite Pens and Plastics Pvt Ltd for Rs. 2 crores to enter the pen segment, later increasing the stake to 60%. In February ’23, Doms acquired a 30% stake in Clapjoy Innovations Pvt Ltd for Rs. 1.5 crores, mainly involved in making wooden board games and educational toys. In August ’23, they acquired a 75% majority stake in Micro Wood Pvt Ltd, a company making decorative tin boxes and paper packaging products, for Rs. 70.5 crores. <\/strong><\/p>\n

Distribution network with pan India presence:<\/strong><\/h3>\n

 The company’s main distribution network in India for general trade (70%+ revenue) involves super-stockists and distributors, supported by a dedicated sales team comprising over 500 members. It manages seven warehouses and three depots. It has established partnerships with over 120 super stockists and more than 4,000 distributors covering more than 120,000 retail touch points across 3,500 cities and towns, reaching 28 states and 8 union territories.<\/p>\n

\"regional<\/a><\/p>\n

Peers -In the organized sector, Doms faces competition from companies such as BIC Cello, Flair Writing Industries<\/a>, Hindustan Pencils, Kokuyo Camlin, Linc, Luxor Writing Instruments, Navneet Education<\/a>, and Rorito International.<\/p>\n

\"core<\/a><\/p>\n

Objects of issue <\/strong><\/h3>\n

1. Offer for Sale:<\/strong> Both promoters are offering their shares for sale in the IPO. FILA is offering shares worth Rs. 800 crores to investors while Sanjay Rajani and Ketan Rajani are offering shares worth Rs. 25 crores each.<\/p>\n

2. Fresh Issue:<\/strong> The company aims to raise Rs. 350 crores through the IPO, of which Rs. 280 crores will be utilized for new capacities, while the rest will be used for general purposes.<\/p>\n