Divgi TorqTransfer Systems IPO: GMP rises, 2 more days to bid. Check subscription status, other details
1 min read . Updated: 02 Mar 2023, 11:37 AM IST
Premium- Divgi TorqTransfer Systems IPO was subscribed 12% on first day
The initial public offering (IPO) of automotive component manufacturer Divgi TorqTransfer Systems received 19% subscription on the second day so far of the sale that opened on Wednesday, March 1, 2023 and will conclude on March 3, 2023. The price band is ₹560-590 a share.
As of 11:35 am on day 2, the issue has been subscribed 0.19 times with retail investors' category booked 0.9x, NIIs 0.10x and QIBs yet to bid, as per the BSE data.
Divgi TorqTransfer systems IPO has fresh issue aggregating up to ₹180 crore and an Offer For Sale of up to 39,34,243 shares. Divgi TorqTransfer Systems on Tuesday said it has raised more than ₹185 crore from anchor investors.
As per market observers, Divgi TorqTransfer Systems shares have been commanding a premium (GMP) of ₹65 in the grey market today, higher than ₹60 in the previous sessions. The equity shares of the company are expected to list on March 14 on stock exchanges BSE and NSE.
Divgi is an automotive component entity, developing and provide system-level transfer case, torque coupler, and Dual Clutch Automatic Transmission (DCT) solutions. It has three manufacturing and assembling facilities located across India.
"Divgi TorqTransfer Systems has maintained a healthy operating cash flow in the last 3 years with a robust revenue growth. The positive outlook of EV segment and government PLI’s scheme will help the company to maintain its performance in future also. We recommend to subscribe Divgi TorqTransfer System IPO from a long term perspective," said Ravi Singh, Vice President and Head of Research, Share India.
Proceeds from the fresh issue will be used towards funding capital expenditure requirements for the purchase of equipment for its manufacturing facilities and general corporate purposes.
"Underpinned by the sound financials, their business model is supported by a consistent track record of revenue growth and profitability with a CAGR of 21.23% and 28.30% between FY20-22. From a valuation standpoint, based on the FY22 figures, the issue appears to be attractively priced when compared to its listed peers. However, the business has high customer concentration risk (91% of revenues comes from the top 5 customers and 54% is generated from 1 customer). With a favorable future growth potential in the long run, we recommend investors to “Subscribe" to this IPO," said Parul Sharma, Research Analyst, Samco Securities.
