IPO Review: DOMS Industries Limited | Should you apply Listing is happening on 28th December 2023. DOMS Industries IPO review | Should i apply to DOMS IPO?
DOMS Industries IPO review
Do you know that in 2023, India is currently at the forefront of the global IPO market? This year, the Indian financial markets are taking a roller coaster in which a record-breaking 21 IPOs have been listed on the main board in the third quarter as compared to the same period last year. There were only four IPOs in 2017. Yes, the funds collected by these IPOs have shown a growth of 376% from the last quarter. After the active month of November, the month of December also showed a growth of 376% on the main board. And the SME segment is going to witness some new IPOs, one of these IPOs is the Indian unit of Italian stationery giant Fila.
we will learn about the business of Doms, its strengths and weaknesses, financials, and IPO details of Doms. So let’s start the IPO of Doms from Wednesday 30th 15th December. It will be open and you can bid for this IPO till the 15th of December Friday. In this IPO of Rs 1200 crore, there is a fresh issue of Rs 350 crore and an offer for sale of Rs 850 crore. I will tell you the remaining important details and dates further, so let us know first. What does the company do?
Dums was started in 1973 when it was known as RR Industries. It was founded by Rasik Lal Amrit Lal.
Raveshia and Mansukh Lal Jamuna Das Rajni started the company which initially sold pencils and crayons and after a decade in 2005, the company launched its flagship brand Dums. Dums is known for its wide range of stationery and eight products. This company operates in seven different categories such as stationery, stationery, stationery, art material, paper, stationery, kits, and combos, and office The company achieved gross product sales of ₹ 1 31 in supplied craft and fine art products in financial terms of ₹ 23.
Achieved Rs 7 Crore Skoala’s stationery category was the major contributor in sales with 46.1 contributions Followed by Skoala’s Art Materials 23.7 7 The company offers a diverse range of over 3800 products out of which 2500 products come under the fine art products category under the Dums brand. Apart from this, the company also launched polymer pencils. Introduced sub-brands like Aris for c3 fine art products and Fixy Fix for Ades products. In India, Dums is the second largest player in the branded stationery and art products market with around 12% market share.
Share by Value is as of FY23 It operates its manufacturing operations from two primary locations Ambar Village in Gujarat and Badi Brahma in Jammu and Kashmir Dums markets its products in India It is distributed through different channels which include 120 super stockists and 4000 distributors who reach 120000 retail points in over 3500 cities. The company also sells its products on e-commerce websites. Apart from this, it also works with DMS OEA and institutions such as educational and corporate. We also partner with bodies where the company provides bulk
The company supplies stationery and art materials. It has a presence in more than 45 countries by September 2023. Its international reach has led to its strategic partnership with Fila Fabrica Ileana Lapus Ad Affini Italy. Fila is globally an icon of Italian creativity through its coloring, drawing, modeling, writing, and painting tools which include 25 renowned brands such as Jit Toe and Dash. The partnership opens doors for Doms to international markets, particularly in Asia Pacific, Europe, and the Middle Eastern markets and also Doms has exclusive
Rights are for the selected products of Fila Group for market sale and distributorship in India, Nepal, Bhutan, Sri Lanka, Bangladesh, Myanmar, and Maladi. Let me now tell you about some of the strengths and weaknesses of Dums. First of all, we will talk about the strengths of the company. has strengthened its market presence through a partnership with Phala and an extensive network under the Dums and Sath brands. The company is now in high demand Focusing on products to enhance market positioning and shelf space, Dums said in the financial year
Plans to invest Rs 800 crore in one of the largest single-location stationery manufacturing facilities in Asia Pacific from FY23 to FY28 which includes expansion of transition capabilities and upgrading of machinery at the own facility. Another strength of the company is its healthy financial Risk Profile They have a strong capital structure and have implemented good debt protection measures. Their total debts in comparison to their net worth, which we call Total Outside Liabilities to Adjusted Net Worth, are quite low at about 86 times.
When it comes to their ability to manage their debt, the numbers look quite healthy. Their interest coverage ratio was above 15 times for Financial Rupees 23. Let us now look at some of the weaknesses of the company. Let’s talk about the challenge. In the stationery industry, the costs of raw materials such as polymers and graphite form a large part of the overall production cost. This means that the profit margins of dorms can be affected by changes in these raw material prices. Dorms are vulnerable to market fluctuations due to their dependence on prime materials.
Which can challenge their financial stability. The second weakness of the company is exposure to intense Competition The company operates in the highly competitive Indian stationery industry where it has to compete with many unorganized players, especially in the lower-end product segments like pens, pencils, and adhesives. Let us now look at the financials of the company in the table that is in front of you. First of all, let us talk about the total revenue which we see increasing consistently between the financial year 21 to 23, this figure has increased from Rs 409 crore.
In the financial year 22 it came to Rs 680 6 crores and in the financial year 23 again a jump is seen and it came to 1217 crores. Talking about profit after tax, in the beginning, a loss has been recorded of 6 crores. In Financial Year 21 after which we are seeing a consistent rise and this rise is quite significant between Financial Year 22 to 23. In Financial Year 22 it is 17 crores and in FY23 it has been recorded at Rs. 103 crores. Talking about some important ratios, the EBITDA margin is 15.4% and the PET margin is 15.4%.
8.49 Company’s PA is 43.1 percent while the industry’s P is 35.9 percent. Net debt to equity ratio is 28 which is quite reasonable. Talking about RO, it is 33.5 RO SE is 33.3 1 P2Y Sale CAGR from Financial Year 21 to 23. The middle is at 72.5. Now let’s talk about the IPO details of the company. The IPO of the company is opening. On the 13th of December 2023, its closing date is the 15th of December 2023. Its price band is ₹ 50 to ₹ 7790 and lot size is 18 shares. Its issue size is ₹ 1200 crore in which fresh issue is ₹ 350 crore and the offer for sale is ₹ 850. This IPO is worth crores Listing is happening on 28th December 2023.