DCX Systems IPO GMP, Subscription, Valuation; Should You Buy on Last Day?

DCX Systems’ IPO Last Day: DCX Systems’ IPO to raise up to Rs 500 crore received good response from bidders. The initial share sale, comprising fresh issuance of shares worth to Rs 400 crore and an offer for sale (OFS) of up to Rs 100 crore by existing shareholders, will be available for bidding for three trading days ending November 2. 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.

DCX Systems IPO: Subscription Status

Investors interest on DCX Systems Limited’s public issue picked up on Day 2 as the issue was subscribed 4.38 times on the BSE and 1.81 times on the NSE.

DCX Systems IPO: Price Band

The price band for DCX Systems IPO has been fixed at Rs 197-207 per share. At least 75 per cent of the IPO is reserved for qualified institutional investors, up to 15 per cent for high-net-worth individuals, and 10 per cent for retail investors.

DCX Systems IPO: Issue Size

The IPO consists of issuance of fresh equity shares worth Rs 400 with a face value of Rs 2 each. Existing promoters and shareholders will sell shares worth Rs 100 crore via an offer for sale (OFS).

DCX Systems IPO: Lot Size

Investors can subscribe to the DCX Systems IPO by betting for a lot of 72 shares or in multiples thereof. At the upper range of the price band, one lot of the IPO is worth Rs 14,904. A retail bidder can bid for 13 lots or 936 shares at maximum.

DCX Systems IPO: Participating Shareholders

NCBG Holdings and VNG Technology are the promoters of the company. The entities will be offloading their stake through the offer for sale. After the issue, the promoter shareholding will decline 24.61 per cent and come down to 73.58 per cent from the current 98.19 per cent stake held by the them in the company.

DCX Systems IPO: Objective

The company proposes to utilise the net proceeds from the fresh issue towards debt payment, funding working capital requirements, investment in its wholly-owned subsidiary Raneal Advanced Systems to fund its capital expenditure expenses and general corporate purposes.

DCX mopped up Rs 225 crore through its anchor book on October 28, ahead of the public issue opening. A total of 12 investors participated in the anchor book and the company finalized the allocation of 1.08 crore equity shares to anchor investors at a price of Rs 207 per share, which is the upper end of price band.

Investors including Volrado Venture Partners Fund, Cohesion MK Best Ideas, Quantum State Investment Fund, India SME Investments, Theleme India Master Fund, Resonance Opportunities Fund, Vikasa India EIF I Fund, and BNP Paribas Arbitrage made investment in the company via anchor book.

DCX Systems IPO: GMP Today

As per market observers, DCX Systems shares are commanding a premium (GMP) of Rs 82 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.

“The company has delivered consistent financial performance. Their revenue from operations grew at a 56.64% CAGR between FY20-22. The company has a strong order book of Rs. 2563 crs as on June, 2022. At the upper band, the issue is priced at PE multiple of around 30x (Post fresh issue) based on FY22 metrics, which looks reasonable. Defense stocks have remained in flavour recently due to government initiatives to push indigenous manufacturing and exports of defense equipments,” said Abhay Doshi, co-founder at UnlistedArena.

DCX Systems IPO: Valuation

“At higher price band, DCX is demanding an EV/Sales multiple of 1.2x, which is lower than the peer average. Considering the favorable macros for the defence manufacturing sector and for the company, we feel the IPO is attractively priced,” said Choice Broking.

Edelweiss Financial Services, Axis Capital and Saffron Capital Advisors are the book running lead managers to the IPO. Link Intime India Private Ltd is the registrar of the share sale.

Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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