Nandan Nilekani-backed Divgi TorqTransfer Systems shares listed at over a 5 per cent premium over IPO price, at Rs 620 on the NSE amid a flat domestic market. Similarly, the stock began its innings at Rs 600 on BSE, just 2 per cent up from its issue price.
The IPO was subscribed 5.44 times, led by retail investors. About 75 per cent of the offer was reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and 10 per cent for retail investors.
The retail part of the issue was subscribed 4.31 times, while non-institutional investors (NIIs) made bids 1.4 times more than the reserved bit. The qualified Institutional Buyers (QIBs) portion was subscribed 7.83 times more than the allotted part.
Divgi TorqTransfer Systems’ Rs 412 crore IPO concluded on 3 March. The price band for the IPO has been fixed at Rs 560-590 a share. The price band for the IPO has been fixed at Rs 560-590 a share. Divgi TorqTransfer Systems IPO comprises a fresh issue of 85.20 lakh shares and a sale of 39.3 lakh shares by promoters and shareholders, including by Oman India Joint Investment Fund and Nandan Nilekani (Family Trust).
Ahead of listed Divgi Torq was commanding a premium of Rs 10-15 in the grey market, hinting towards a listing at mild premium over its issue price. The listing has been on similar lines, despite the volatility in the broader markets.
Pune-based Divgi TorqTransfer Systems is engaged in the business as an automotive component entity. Incorporated in 1964, the company is among very few automotive component entities in India with the capability to develop and provide system-level transfer cases, torque couplers, and dual-clutch automatic transmission solutions.
The automotive player mainly caters to the passenger and small commercial vehicle industry but it is venturing into EV (Electric Vehicle) transmissions. The company has manufacturing facilities in Bhosari and Shivare in Pune and Sirsi in Karnataka.
What Should Investors Do Now?
Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said: “Divgi TorqTransfer Systems shares have debuted as a flat-to-positive listing at Rs. 620 (+5 per cent) to its issue price, because of equity market conditions. The issue had also received a good response from investors on both the institutional and retail sides. It is dealing in a niche segment with high entry barriers. Divgi TTS has the advantage of an experienced management team. The company had also demonstrated consistent financial performance over the years. However, the majority of its business is dependent on a few customers, and geopolitical risk and competition from global players are some concerns. The issue had a P/E valuation of 35x, which was fairly priced. The current market condition is also not favorable. So, allottees who applied for the public offering for listing premium are advised to maintain their stop-loss at 610 and wait for further upside, whereas those who have a medium- to long-term perspective can hold the stock.”
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