Two forthcoming IPOs: SignatureGlobal India and Divgi TorqTransfer

While the mainboard IPOs have been virtually dry since the Adani Transmission FPO got called off, there are now the first indications coming that the IPO market may see a quick return of interest. Two mainboard IPOs are expected to announce details of their IPOs shortly viz. SignatureGlobal (India) Ltd and Divgi TorqTransfer System Ltd. Here are some basic details of these two forthcoming mainboard IPO issues.

What you must know about SignatureGlobal (India) Ltd

SignatureGlobal (India) Ltd was incorporated at the turn of the millennium in the year 2000 and it is engaged in the business of real estate development. The company predominantly operates in real estate projects in the Delhi and NCR (national capital region) segments. In the last 23 years of its existence, SignatureGlobal (India) Ltd has sold over 23,453 units of residential and commercial properties. Its focus on the residential side is largely on the low cost and affordable housing segments. Between FY20 and FY22, the top line sales of the company grew at a CAGR of 143%. The segment is low on margins but high on demand.

The pricing of the IPO is yet to be announced. What we know is that the company plans to raise Rs1,000 crore through the IPO route. Out of this, Rs750 crore would be by way of fresh issue of shares while Rs250 crore will be by way of offer for sale (OFS). The company stock with a face value of Rs1 per share would be listed on the NSE and the BSE. Out of the total issue size, 75% of the IPO shares will be reserved for the QIB (qualified institutional buyers) category, 10% for retail and 15% for the HNI / NII category.

For the fiscal year ended March 2022 (FY22), SignatureGlobal (India) Ltd has reported net loss of Rs116 crore on a top line sales revenue of 940 crore. The company is already having negative net worth and hence the fresh issue would be essential for the company to shore up its net worth base. The book running lead manages for the IPO will be ICICI Securities Ltd, Axis Securities Ltd and Kotak Mahindra Capital Company Ltd. Link Intime India Private Limited will be the registrar for the IPO of SignatureGlobal (India) Ltd.

What you must know about Divgi TorqTransfer System Ltd

Divgi TorqTransfer System Ltd was incorporated way back in the year 1964, so it has a nearly 60 year pedigree in India. It is engaged in the business of manufacturing and supplying automotive components or ancillaries as they are better known as. Some of major products manufactured by Divgi TorqTransfer System Ltd include system level transfer cases, torque couplers and dual clutch automotive transmission solutions. For the PV segment, this company is the largest supplier of transfer case systems. Divgi TorqTransfer System Ltd serves the system level solution providers and also the component kit suppliers to global OEMs. The fresh issue portion will be used largely for purchase of production equipment.

The pricing of the IPO is yet to be announced. What we know is that the company plans to raise Rs200 crore through the issue of fresh shares. In addition, the company early investors and promoters will also offer 31.47 lakhs shares of Divgi TorqTransfer System Ltd by way of offer for sale (OFS). The total size of the issue would be only known after the issue price and the number of shares are announced. The company stock with a face value of Rs5 per share would be listed on the NSE and the BSE. Out of the total issue size, 75% of the IPO shares will be reserved for the QIB (qualified institutional buyers) category, 10% for retail and 15% for the HNI / NII category.

For the fiscal year ended March 2022 (FY22), Divgi TorqTransfer System Ltd has reported net profits of Rs46.15 crore on a top line sales revenue of 241.87 crore, translating into a net margin of 19.08%. It has almost reduce its debt to zero levels, so the financial risk in the IPO is quite limited. The book running lead manages for the IPO will be INGA Ventures Private Limited and Equirus Capital Private Limited. Link Intime India Private Limited will be the registrar for the IPO of Divgi TorqTransfer System Ltd.