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The three-day initial public offering (IPO) of DCX Systems, manufacturer of cables and wire harness assemblies, will open for public subscription next week on Monday, October 31, 2022 and conclude on Wednesday, November 2, 2022. The company has fixed a price band of 197 to 207 per share for its initial share sale. 

As per market observers, DCX Systems shares are commanding a premium (GMP) of 80 in the grey market today. The shares of the company are expected to list on stock exchanges BSE and NSE on Friday, November 11, 2022.

DCX Systems IPO consists of issuance of fresh equity shares worth 400 crore. Apart from the fresh issue, the promoters and shareholders of the company will sell shares worth 100 crore via an offer for sale (OFS). NCBG Holdings and VNG Technology are the promoters of the company.

DCX Systems Ltd, the Bengaluru-based company, is primarily engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies, and are also involved in kitting.

Incorporated in 2011, DCX Systems Limited (DSL) is among the leading Indian players in the manufacture of electronic sub-systems and cable harnesses. The company operates through their manufacturing facility located at the Hi-Tech Defense and Aerospace Park SEZ in Bengaluru, Karnataka.

"In terms of valuations, the post-issue P/E works out to 30.5x FY22 EPS (at the upper end of the issue price band) which is low compared to its peers like Paras Defense & Space Technologies Ltd, Data Patterns (India) ltd and Sundram Fasteners Ltd. Further, DSL has better revenue/PAT growth (CAGR of 57%/159% respectively) over 2 years, healthy return on equity and company also has a strong order book which provides visibility for next 2 years. Considering all the positive factors, we believe this valuation is at reasonable levels," said Angel One in an IPO note.

Investors can bid for a minimum of 72 equity shares and in multiples of 72 equity shares thereafter. Edelweiss Financial Services, Axis Capital and Saffron Capital Advisors are the book running lead managers to the issue. Link Intime India Private Ltd is the registrar of the share sale.

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