Divgi TorqTransfer IPO | Review

Spread the love

Divgi TorqTransfer Systems has come up with an initial public offer (IPO). It will open on March 01-03, 2023 at Rs.560-590 a share. The IPO issue size is around Rs.180.00 crores. The minimum bid will be for 25 shares and in its multiples thereafter.

Overview

Divgi TorqTransfer Systems was incorporated in the year 1964. It is amongst the very few suppliers in India that have the capability to develop and provide system-level transfer cases, torque coupler, and DCT solutions. Also, it is one of the leading players supplying transfer case systems to automotive OEMs in India and the largest supplier of transfer case systems to passenger vehicle manufacturers in India. The company is also the only player manufacturing and exporting transfer cases to global OEMs from India, and the only manufacturer of torque couplers in India.
Divgi also has the capability to develop and provide transmission systems for electric vehicles (“EVs”). It is in the process of designing and developing prototypes of transmission systems for EVs pursuant to the receipt of a business award for this purpose. The company actively collaborates with Europe’s transmission engineering consulting firms like FEV and Hofer.

Website – http://www.divgi-tts.com/

Promoters

Jitendra Bhaskar Divgi – 2.65%	Hirendra Bhaskar Divgi- 2.66%
Divgi Holdings Private Limited – 57.32%

Promoter Holding

Pre-Issue Shareholding – 67.18%

Post-Issue Shareholding –

Strength & Weakness

Strengths	Weaknesses
In-house software development capability	Business largely depends on top 5 customer
Strategically located manufacturing facilities	Risk of volatility in price of raw materials
Long-term relationships with domestic and global customers	Geographical concentration of exports to certain countries
Experienced board of directors	Depend on some 3rd party suppliers for certain key components & raw materials
Skilled and qualified workforce	Exposed to foreign currency exchange rate fluctuations
Consistent financial performance	Rely on skills & experience of management
Focus on innovation and R&D capabilities	Business faces substantial competition

Products

Torque Transfer Systems	Manual Transmission
Synchronizer Systems	Dual Clutch Transmission
Transmissions for BEV	Precision components

Customers

Mahindra & Mahindra	Tata Motors
Toyota Kirloskar	BorgWarner

Competitors

Aisin	Dana
Magna	Univance
Schaeffler	Valeo
Natesan Synchrocones	Yugal Precision

Company Financials

Year	Revenue (in Crore)	Profit (in Crore)
31-Mar-2020	170.74	28.04
31-Mar-2021	195.03	38.04
31-Mar-2022	241.87	46.15
30-Sep-2022	137.55	25.66

Objects of Issue

1) Funding capital expenditure requirements for the purchase of equipments/machineries at the company’s manufacturing facilities

2) General corporate purposes.

Divgi TorqTransfer IPO Lot Size

Application	Lot	Shares	Amount
Retail (Min)	1	25	Rs.14,750
Retail (Max)	13	325	Rs.1,91,750
S-HNI (Min)	14	350	Rs.2,06,500
B-HNI (Max)	68	1,700	Rs.10,03,000

Divgi TorqTransfer IPO Details

IPO Opening Date	March 1, 2023
IPO Closing Date	March 3, 2023
Face Value	Rs.5 per Equity Share
IPO Price	Rs.560-590 per share
Market Lot	25 shares
Minimum Order Quantity	25 shares
Listing At	NSE, BSE
Fresh Issue	Rs.180.00 Crore
Offer for Sale	Rs.39,34,243 shares
Issue Size	Up to Rs.180.00 Crore
QIB Shares Offered	75% of the offer
Retail Shares Offered	10% of the offer
NII/HNI Shares Offered	15% of the offer

Divgi TorqTransfer IPO Timetable

IPO Date	March 01-03, 2023
Allotment Date	March 09, 2023
Initiation of Refunds	March 10, 2023
Credit of share to Demat a/c	March 13, 2023
IPO Listing Date	March 14, 2023