DOMS Industries IPO Final Subscription at 93.52 times

The IPO of DOMS Industries Ltd opened for subscription on 13th December 2023 and closed on 15th December 2023. The stock of DOMS Industries Ltd has a face value of ₹10 per share and for the book building IPO the price band range is ₹750 to ₹790 per share. The final price will be discovered within this band. The IPO of DOMS Industries Ltd will be a combination of a fresh issue and an offer for sale (OFS). The fresh issue portion of DOMS Industries Ltd IPO comprises the issue of 44,30,380 shares (44.30 lakh shares approximately), which at the upper price band of ₹790 per share will translate into fresh issue size of ₹350 crore. The offer for sale (OFS) portion of the IPO of DOMS Industries Ltd comprises the sale of 1,07,59,493 shares (107.59 lakh shares), which at the upper price band of ₹790 per share will translate into an offer for sale (OFS) size of ₹850 crore. The OFS is offered by the promoter shareholders of the company. Out of the ₹850 crore OFS, the corporate promoter (FILA of Italy) will offer shares worth ₹800 crore while the two promoter shareholders Sanjay Rajani and Ketan Rajani will offer shares worth ₹25 crore each. 

How does the overall IPO size up? The DOMS Industries IPO will comprise of the issue and sale of 1,51,89,873 shares (151.90 lakh shares approximately), which at the upper price band of ₹790 per share will translate into total IPO issue size of ₹1,200 crore. While the fresh issue will be capital and EPS dilutive, the offer for sale portion will only result in transfer of ownership. The entire OFS is being offered by the promoter shareholders of DOMS Industries Ltd. The net proceeds from the IPO fresh issue portion will be utilized for partly financing the establishing of a new manufacturing facility to expand capacity of writing instruments. The IPO will be lead managed by JM Financial, BNP Paribas, ICICI Securities and IIFL Securities. Link Intime India Private Ltd is the registrar to the issue.

How subscriptions evolved in the IPO period

While the QIB portion and the HNI / NII portion picked up traction on the last day, the overall journey was quite rapid for the retail investors. In fact, the QIB portion got fully subscribed only on the second day of the IPO while the HNI / NII portion and the retail portion got fully subscribed on the first day of the IPO itself. Even the overall IPO saw subscription book filling up 6.20 times, at the close of the first day of the IPO. The IPO was kept open for a total period of 3 days and here is the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 93.52 times subscribed at the close of the third and final day of the IPO on 15th December 2023. Here is a quick look at how the various categories saw traction on the last day of the IPO.
    • The QIB portion got just 0.03 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 1.24X to 115.97X.

    • The HNI / NII portion got 8.44 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 27.38X to 66.51X.

    • Retail portion got 20.77 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 44.71X to 69.67X.

    • The overall IPO got 6.20 times subscribed at the end of the first day of the IPO. However, on last day of the IPO, overall subscription moved from 16.44X to 93.52X.

Rapid update on the overall IPO response

The IPO saw fairly strong response on the Day-1 and Day-2, with most of the action visible only on Day-3 of the IPO, as is normally the case. However, the IPO did close with relatively healthy subscription numbers at the close of Day-3. In fact, the IPO of DOMS Industries Ltd got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, DOMS Industries Ltd IPO was subscribed 93.52X overall, with best demand coming from the QIB segment, followed by the Retail segment and the HNI / NII segment in that order. 

In fact, the institutional segment and the HNI / NII segments saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion was relatively strong, although it was fully subscribed on Day-1 of the IPO itself, but subsequent traction was slower than the others. Firstly, let us look at the details of overall allocation.

Having understood the allocation of shares across various categories, Let us look at how the subscription data played out for the IPO at an overall level and at a more granular level.

As of close of 15th December 2023, out of the 88.37 lakh shares on offer in the IPO, DOMS Industries Ltd saw bids for 8,264.88 lakh shares. This implies an overall subscription of 93.52X overall. The granular break-up of subscriptions was in favour of the QIB investors followed by the Retail investors and the HNI / NII investors in that order. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Data Source: BSE

Subscription status of QIB Portion

On 12th December 2023, DOMS Industries Ltd completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated through the process of book building. A total of 68,06,961 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹790 per share (including premium of ₹780 per share) which resulted in an overall allocation of ₹537.75 crore. The anchors absorbed 45% of the total issue size of ₹1,200 crore. 

The QIB portion (net of anchor allocation as explained above) had a quota of 47.80 lakh shares of which it has got bids for 5,543.51 lakh shares at the close of Day-3, implying a subscription ratio of 115.97X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the DOMS Industries Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 66.51X (getting applications for 1,589.68 lakh shares against the quota of 23.90 lakh shares). That is a relatively strong response at the close of Day-3 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was visible as the overall HNI / NII portion added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 67.66X while the below ₹10 lakh bid category (S-HNIs) got subscribed 64.23X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed just 69.67X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is just 10% in this IPO. For retail investors; out of the 15.93 lakh shares on offer, valid bids were received for 1,110.05 lakh shares, which included bids for 989.24 lakh shares at the cut-off price. The IPO is priced in the band of (₹750 to ₹790 per share) and has closed for subscription as of the close of Friday, 15th December 2023.