Mumbai: Consumer electronics manufacturer Dixon Technologies India Ltd has debuted at the stock exchanges at Rs2,725 per share, offering a premium of 60% from its issue price of Rs1,766.
At 10.05am, the stock was trading at Rs2,841.15 on the BSE, up 60.88% from previous close, while India’s benchmark Sensex index rose 0.64% to 32,480.31 points.
The initial public offering (IPO) of Dixon Technologies, which was open from 6-8 September with a price band of Rs1,760-1,766 per share, was oversubscribed 117.83 times. The portion reserved for qualified institutional buyers (QIBs) was oversubscribed 134.66 times, for non-institutional investors 345.61 times and for retail individual investors 10.60 times.
Jaikishan J. Parmar, research analyst - midcaps, Angel Broking, had said that even though the company is operating on thin margins, it has registered return on capital of a whopping 33.3% in FY2017 and has been generating positive cash flow from operations over the last five years with negligible debt post the IPO.
“EBITDA (earnings before interest, tax, depreciation and amortization) margin remains volatile owing to addition of low margin products and higher employee cost. DTL recorded net profit CAGR (compounded annual growth rate) of 78% in FY13-17 owing to sharp sales growth. Lower capex requirement on assembling capacity has translated to higher asset turnover, which, in turn, drives the return ratios of the company,” ICICI Securities Ltd said in a report on 5 September.
Backed by Motilal Oswal Private Equity (MOPE), Dixon is the largest home-grown design-focused and solutions company engaged in manufacturing products in consumer durables, lighting and mobile phone segments in India.
The company manufactures electronics products for Panasonic, Philips Lighting India, Haier Appliances, Gionee, Surya Roshni, Reliance Retail, Intex Technologies and Mitashi.
The proceeds of the funds raised via the IPO will be used for repayment of debt (Rs22 crore), capital expenditure including facility expansion and IT upgradation and backward integration (Rs27 crore).