There are many upcoming IPOs in 2023 similar to 2021 and 2022 which saw many big names cashing in on increased interest in the Indian stock markets and its growth trajectory. The latest to join the IPO scenario is Divgi TorqTransfer Systems Limited IPO which is coming up this week. This company is from the auto component industry with top auto companies like Tata Motors, Mahindra & Mahindra, and Toyota as its customers.
Divgi TorqTransfer Systems Limited IPO was open for subscription from 1st March 2023 till 3rd March 2023. The allotment of shares for this IPO is expected today, 9th March, 2023. Divgi TorqTransfer Systems’ initial public offering (IPO) was subscribed 5.44 times by the last day of offer.
Here are all the essential details of Divgi TorqTransfer Systems Limited IPO, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.
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IPO Details
The key details of the Divgi TorqTransfer Systems Limited IPO are as under.
- IPO Size
The size of the IPO and different categories of the issue are:
| Category | Details |
| IPO Opening Date | 1st March 2023 |
| IPO Closing Date | 3rd March 2023 |
| Listing | NSE, BSE |
| Issue Type | Book Built Issue IPO |
| Face value of shares | Rs. 5 per share |
| IPO Price Band | Rs. 560 – Rs. 590 per share |
| IPO Size | Rs. 412 crores |
| Offer For Sale | Rs. 180 crores |
| Fresh Issue | Rs. 232 crores |
- IPO Dates
The important dates for the Divgi TorqTransfer Systems Limited IPO are highlighted below:
| Event | Date |
| Opening date | 1st March 2023 |
| Closing Date | 3rd March 2023 |
| Allotment date | 9th March 2023 |
| Refund Date | 10th March 2023 |
| Share Credit Date | 13th March 2023 |
| Listing Date | 14th March 2023 |
- IPO Lot Sizes
Investors can subscribe to the shares of Divgi TorqTransfer Systems Limited IPO in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:
| Category | Details |
| Investment in lots (for retail investors) | Minimum – 1 lotMaximum – 13 lots |
| Shares | Minimum – 25Maximum – 325 |
| Investment amount | Minimum – Rs. 14,750Maximum – Rs. 1,91,750 |
- IPO Reservation
The categories of eligible investors and their share in the IPO are tabled below:
| Category of Investor | Reservation Percentage |
| QIB (Qualified Institutional Buyers) | 75% |
| NII (Non-Institutional Bidders) | 15% |
| RII (Retail Individual Investors) | 10% |
Subscription status at the end of Day 2 of Divgi Torq Transfer Systems
According to the data from BSE, investors made a bid for 8,85,400 equity shares, or 0.23 per cent, against a total of 38,41,800 equity shares offered by the company, as of 14.15 hours on Thursday, 02 March 2023.
However, the retail portion of the issue was subscribed 1.10 times, whereas allocation for non-institutional investors (NIIs) was booked 11 per cent. However, the quota for qualified institutional bidders had not seen start of subscriptions yet.
As per market observers, Divgi TorqTransfer Systems shares commanded a premium (GMP) of Rs. 35 in the grey market today, lower from Rs. 60 in the previous sessions.
Divgi TorqTransfer Systems Limited IPO Objectives
The key objectives of the IPO are stated below:
- The primary objective of the IPO is to utilise the proceeds for funding capital expenditure requirements which is purchasing new equipment or machinery for the manufacturing facilities of the company.
- The balance proceeds will be used for general corporate purposes.
Top things to know about Divgi TorqTransfer Systems Limited IPO
Divgi TorqTransfer Systems Limited IPO was established in 1964 and is one of the leading players in the auto components industry. The company is engaged in the business of developing system-level transfer cases, torque couplers, and dual-clutch automatic transmission solutions. The company has big domestic names like Tata Motors and Mahindra & Mahindra as its customers and also has a global footprint in countries like UK and USA in the west to China, Thailand, Korea, and Japan in the east. They are also the sole Indian manufacturer and exporter of transfer cases to global OEMs and the only manufacturer of torque couplers in the country.
The company is a manufacturer and supplier of a wide range of products that includes,
- Torque transfer systems (which includes four-wheel-drive (4WD) and all-wheel-drive (AWD) products)
- Synchronizer systems for manual transmissions and DCT
- Components for the above-mentioned product categories for torque transfer systems and synchronizer systems in manual transmission, DCT, and EVs.
Financials of the company
Divgi TorqTransfer Systems Limited financials are given in the table below:
| Year | Total Assets (Rs. In crores) | Operating Revenue (Rs. In crores) | Profit after tax (Rs. In crores) | Basic EPS(Rs.) | Diluted EPS(Rs.) | RONW |
| Mar-2022 | 405 | 234 | 46.15 | 16.76 | 16.76 | 13.57% |
| Mar-2021 | 363 | 187 | 38.04 | 13.82 | 13.82 | 12.86% |
| Mar-2020 | 304 | 159 | 28.03 | 11.64 | 10.18 | 13.38% |
(Source: RHP)
Strengths of the company
Some of the key strengths of Divgi TorqTransfer Systems Limited that investors can take note of are:
| Category | Details |
| Business model | The company is a market leader in developing and providing system level transfer case, torque coupler, DCT solutions and transmission systems diverse range of vehicles and geographies.They have also shown consistent financial performance with a focus on R&D and innovation. |
| Customer base | The company has a diverse customer base across different industries and geographies along with long-term relationships with marque customers within India as well as abroad. |
| Management | The company has the benefit of an experienced Board of Directors and senior management team along with a skilled workforce. |
Risks of investment
Here are some of the risks that investors of Divgi TorqTransfer Systems Limited IPO should know:
| Category | Details |
| Business viability and profitability | The business is significantly dependent on the power and fuel requirements and any disruption in the supply of these key components will have an adverse impact on operations and ultimately increase production costs.The company has the risk of facing an interrupted or inadequate supply of raw materials and packaging materials resulting in price fluctuations. The company could also see a negative impact on its cash flow and revenue on account of transportation fluctuations and logistics costs |
| Competition | The industry segment of the company is quite fragmented. The company faces heavy competition from large and small competitors in the industry |
What is the Grey Market Premium (GMP) of Divgi TorqTransfer Systems Limited IPO?
As of March 9th, 2023, the grey market premium for the shares of Divgi TorqTransfer Systems Limited is approximately Rs. 35 as per market observers.
Should you apply for Divgi TorqTransfer Systems Limited IPO?
The company is a market leader in its space and has a long-standing relationship with marquee customers. The company has also shown consistently good financial results over the years which further assures investors of the viability of their investment. Investors can therefore apply for the IPO and consider it a good addition to their long-term portfolio.
How to apply for Divgi TorqTransfer Systems Limited IPO?
Investors can invest in this IPO through the Fisdom app.
Divgi TorqTransfer Systems Limited IPO FAQs
Divgi TorqTransfer Systems Limited is coming out with an IPO to the tune of Rs. 412 crores. This offer consists of a fresh issue worth Rs. 180 crores and Rs. 232 crores in the form of an Offer for sale.
The Registrar for Divgi TorqTransfer Systems Limited IPO is Link Intime India Private Limited.
The core industry that Divgi TorqTransfer Systems Limited belongs to is the auto components industry and is the sole manufacturer of torque couplers in India.
The listing date for Divgi TorqTransfer Systems Limited IPO is 14th March 2023.
