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Review By Dilip Davda on August 30, 2017
Dixon Technologies (India) Limited (DTIL) is the largest Indian home grown design-focused and solutions company and leading Original Design Manufacturer (“ODM”) of lighting products, LED TVs and semi-automatic washing machines in India. DTIL’s diversified product portfolio includes (i) consumer electronics like LED TVs, (ii) home appliances like washing machines, (iii) lighting products like LED bulbs and tube lights, down lighters and CFL bulbs and (iv) mobile phones. The company also provides solutions in reverse logistics i.e. repair and refurbishment services of set top boxes, mobile phones and LED TV panels. Its key customers include Panasonic India Private Limited, Philips Lighting India Limited, Haier Appliance (I) Pvt. Ltd., Gionee, Surya Roshni Limited, Reliance Retail Limited, Intex Technologies (I) Ltd., Mitashi Edutainment Pvt. Ltd., Dish Infra Services Private Limited.
DTIL is a fully integrated end-to-end product and solution suite to original equipment manufacturers (“OEMs”) ranging from global sourcing, manufacturing, quality testing and packaging to logistics. As an ODM, it develops and design products in-house at their R&D centre. DTIL manufactures and supplies these products to well-known companies in India who in turn distribute these products under their own brands.
To part finance its repayment/pre-payment, in full or in part, of certain borrowings availed by the Company, setting up a unit for manufacturing of LED TVs at the Tirupati Facility, enhancement of their backward integration capabilities in the lighting products vertical at the Dehradun I Facility, upgradation of the information technology infrastructure of the Company and general corporate fund needs, DTIL is coming out with a maiden IPO to raise fresh equity capital worth Rs. 60 crore (approx. 339750 equity shares) and offer for sale of 3053675 shares to mobilize Rs. 597.45 to Rs. 599.28 crore (based on lower and upper price bands) via book building route. Issue is having a price band of Rs. 1760 – Rs. 1766 per share of Rs. 10 each. It opens for subscription on 06.09.17 and will close on 08.09.17. Minimum application is to be made for 8 shares and in multiples thereon, thereafter. Issue constitutes approx. 20% of fully diluted post issue paid up capital of the company. Issue has allocation quota of 50% for QIBs, 15% for HNIs and 35% for retail category.
Post allotment, shares will be listed on BSE and NSE. BRLMs to this issue are IDFC Bank Ltd, IIFL Holdings Ltd, Motilal Oswal Investment Advisors Ltd and Yes Securities (India) Ltd. Karvy Computershare Pvt. Ltd is the registrar to the issue. Having issues initial equity at par, it raised further equity in a price range of Rs. 40 to Rs. 330 per share between March 1996 and September 2016. It has also issued bonus shares in the ratio of 4 for 3 on 20th September 2016. Post issue its current paid up equity capital of Rs. 10.98 crore will stand enhanced to Rs.11.32 crore.
On performance front, for last four fiscals, DTIL has (on a consolidated basis) posted turnover/net profits of Rs. 1097.09 cr./ Rs. 14.71 cr. (FY14), Rs. 1203.13 cr. / Rs. 13.04 cr. (FY15), Rs. 1391.17 cr. / Rs. 42.57 cr. (FY16) and Rs. 2458.26 cr. / Rs. 50.38 cr. (FY17). For last two fiscals, its top and bottom line has marked spectacular growth which is due to launch of mobile, CCTV and LED lightings related activities. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 40 and at a P/BV of 9.8 which makes it a fully priced issue. On consolidated basis last three fiscal’s average RoNW is 26.62%. It has no peers to compare with.
On BRLM’s front, 4 merchant bankers associated with this issue have handled 22 public issues in past three years out of which 8 issues closed below the issue price on listing date.
Conclusion: Considering last two fiscals performance and the growth in the segments of the company’s operations, risk savvy investors may consider moderate investment for medium to long term in this fully priced issue.
Review By Dilip Davda on August 30, 2017
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Dixon Technologies (India) Limited offers an early investment opportunity in Dixon Technologies (India) Limited. A stock market investor can buy Dixon IPO shares by applying in IPO before Dixon Technologies (India) Limited shares get listed at the stock exchanges. An investor could invest in Dixon IPO for short term listing gain or a long term.
Read the Dixon IPO recommendations by the leading analyst and leading stock brokers.
Dixon IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Dixon IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Dixon IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Dixon IPO.
The Dixon IPO allotment status will be available on or around September 13, 2017. The allotted shares will be credited in demat account by September 15, 2017. Visit Dixon IPO allotment status to check.
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