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DCX Systems, a Bengaluru-based electronic sub-systems and cable harnesses manufacturing firm, on Friday saw a stellar debut listing on the stock market. It is currently trading at Rs 304.4 apiece on the BSE a premium of about 47 per cent over its issue price of Rs 207. The listing premium is in line with the trend in the grey market premium.
During the debut listing on Friday, DCX Systems opened at Rs 286.25 apiece on the BSE, against the issue price of Rs 207. It touched its high of Rs 304.85 and a low of Rs 286.25 during the early trade.
Pravesh Gour, senior technical analyst at Swastika Investmart, said, “The company’s strong listing can be attributed to unexciting investor subscription levels. As the company has been able to create long-term and deeply entrenched relationships with its clients due to its execution capability in terms of time & cost, ability to maintain confidentiality, and experienced management team.”
Gour, however, said there are concerns with the company like high dependence on key customers, the majority of the revenue from low margin built to print offset defense contracts, the regulated nature of the industry, high debt to equity, and high working capital requirements. “Therefore, we advise investors to lock in listing gains and only aggressive investors should consider making a long-term commitment to the company. Those who applied for listing gains can maintain a stop loss of Rs 245.”
DCX Systems IPO was open for public subscription during October 31-November 2. On its last day, the IPO was subscribed 69.79 times, receiving bids for 101.27 crore equity shares against 1.45 crore shares on offer. While the qualified institutional buyer portion was subscribed 84.32 times, the non-institutional investors portion was subscribed 43.97 times. The retail portion also witnessed good participation and was subscribed 61.77 times.
At least 75 per cent of the IPO was reserved for qualified institutional investors, up to 15 per cent for high-net-worth individuals, and 10 per cent for retail investors.
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).
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.
Equity benchmark Sensex on Friday surged by 1,034.01 points, or 1.71 per cent, to hit 52-week high of 61,647.71 in the early trade. On similar lines, the broader NSE Nifty also surged 293.15 points to 18,321.35. Among the 30 shares of Sensex, all stocks, except Mahindra and Mahindra, were in the green.
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