Dhoot Transmission shares list at 38% premium over IPO price, beat Street expectations

Dhoot Transmission made a strong debut on the domestic bourses on Monday, defying weakness in the broader market, as shares of the Bain Capital-backed auto components maker listed at a 38% premium over its initial public offering (IPO) price.

Shares of Dhoot Transmission got listed at ₹1,193.80 on the BSE, up 37.06% over the issue price of ₹871 per share, with a market capitalisation of ₹24,419 crore. On the NSE, the stock debuted at ₹1,200, up 37.77% against the IPO price.

The stock’s stellar debut comes against the backdrop of a cautious market, with benchmark indices Sensex and Nifty trading lower by up to 0.4% amid weak global cues.

Listing exceeds expectations

The listing was better than Street expectations, as Dhoot Transmission shares were commanding a 29.62% premium in the grey market ahead of their debut. The shares were trading at a grey market premium (GMP) of ₹258, indicating an estimated listing price of around ₹1,129 apiece.

The ₹3,066.89-crore IPO of Dhoot Transmission, which was open for bidding from August 10 to August 12, was subscribed 74.21 times. The issue received bids for 185.20 crore equity shares against 2.50 crore shares on offer.

The IPO garnered an overwhelming response from qualified institutional buyers (QIBs), with their portion subscribed 212.92 times. The non-institutional investor (NII) category was subscribed 51.93 times, while the retail portion received 8.12 times the bids.

The company had reserved 50% of the net issue for QIBs, 35% for retail investors and the remaining 15% for NIIs.

Ahead of the IPO, the company raised ₹918.27 crore from 72 anchor investors by allotting 1,05,42,657 equity shares at ₹871 apiece. Of the total shares allotted to anchor investors, 64,59,984 shares, or 61.27% of the total allocation, were allotted to eight domestic mutual funds through 46 schemes, Dhoot Transmission said in an exchange filing.

Another 9,21,895 shares, or 8.74% of the anchor allocation, were allotted to life insurance companies and pension funds, according to the filing.

Dhoot Transmission’s IPO comprised a fresh issue of 1.61 crore equity shares worth ₹1,400 crore and an offer for sale (OFS) of 1.91 crore shares aggregating to ₹1,666.89 crore.

The company plans to use the proceeds from the fresh issue for debt repayment, capital expenditure, funding working capital requirements and general corporate purposes. The fundraise is expected to strengthen its balance sheet and support its next phase of growth.

Founded more than two decades ago by promoter Rahul Dhoot, the Maharashtra-based company manufactures a wide range of automotive and industrial electrical components, including wiring harnesses, automotive switches, electronic sensors and controllers, connectors and terminals, automotive cables, power cords and battery packs. Bain Capital currently owns a 49% stake in Dhoot Transmission following the consolidation of promoter-held entities into the company.

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