DOMS Industries Limited IPO

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  1. Business Scope and Market Position:
    • The company is a holistic creative products company with a leading position in India’s ‘stationery and art’ products market, based on a Technopak Report.
    • The company designs, develops, manufactures, and sells a wide range of products, primarily under the flagship brand ‘DOMS.’
    • It operates in both domestic and international markets, with a strong brand recall among consumers.
  2. Product Categories:
    • The company classifies its products into seven categories: scholastic stationery, scholastic art material, paper stationery, kits and combos, office supplies, hobby and craft, and fine art products.
  3. Market Share and Growth:
    • Core products like ‘pencils’ and ‘mathematical instrument boxes’ enjoy significant market shares (29% and 30%, respectively).
    • The company claims to be the fastest-growing ‘stationery and art material’ products company in India in terms of revenue from Fiscal 2020 to Fiscal 2022.
  4. Company History and Acquisitions:
    • The company’s history dates back to 1973 with the formation of ‘R.R. Industries.’
    • It acquired the business of partnership firms, including ‘S. Tech Industries,’ to streamline operations and achieve integration.
    • In 2012, the company entered a strategic partnership with FILA, an Italian multinational company in the supply of ‘art materials’ and ‘stationery products.’
  5. Partnership with FILA:
    • The partnership with FILA has facilitated access to international markets, expanded R&D capabilities, and global distribution of the ‘DOMS’ brand.
    • There’s an exclusive tie-up with certain entities of the FILA Group for distribution and marketing in specific regions.
  6. Product Portfolio and Brands:
    • Products are marketed under the flagship brand ‘DOMS,’ along with other brand/sub-brands like ‘C3,’ ‘Amariz,’ and ‘Fixyfix.’
    • While ‘wooden pencils’ contribute significantly to revenue, the company has diversified its product offerings to minimize dependence on a single product segment.
  7. Manufacturing Operations:
    • The company undertakes manufacturing operations in facilities located in Umbergaon, Gujarat, and Bari Brahma, Jammu and Kashmir.
    • Umbergaon Manufacturing Facilities are modern and automated, covering a significant land area. The Jammu Manufacturing Facility focuses on producing wooden slats.
    • Vertical integration includes procurement of raw materials, molding, assembling, and integrating sub-assemblies into finished products.
  8. Expansion and Growth Strategy:
    • The company has acquired additional land adjacent to its existing Umbergaon Manufacturing Facilities to support its growth strategy and expand manufacturing capabilities.

Objects of the DOMS Industries Limited IPO:

The net proceeds of the Fresh Issue, i.e., gross proceeds of the Fresh Issue less the offer expenses apportioned to the Company ("Net Proceeds") are proposed to be utilised in the following manner: 1. Proposing to partly finance the cost of establishing a new manufacturing facility to expand its production capabilities for a wide range of writing instruments, watercolour pens, markers, and highlighters. 2. General corporate purposes. Total number of shares are issues: - i. Fresh Issue is 4,430,380 shares, ii. Offer for Sale is 10,759,493 shares.

DOMS Industries Limited IPO Details:

Open Date: Dec 13 2023
Close Date: Dec 15 2023
Total Shares: 15,189,873
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 1,200 Cr.
Lot Size: 18 Shares
Issue Price: ₹ 750 - 790 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 20 2023

Promoters And Management:

Gianmatteo Terruzzi, aged 51 years, is the Chairman and Independent Director of the Company. He holds a degree in Economics and Business from the Universita Cattolica Del Sacro Cuore, Milan and is registered as a fiduciary in the Register of Fiduciaries, Republic and Canton of Ticino. He was previously associated with LVT Advisors S.R.L. as its sole director, Egida SRL as a director, I.R.E. 2 S.R.L. as its sole director and Lusben Varazze S.R.L. as chief executive officer. Santosh Rasiklal Raveshia, aged 47 years, is the Managing Director and one of the Individual Promoters of the Company. He has been associated with the Company since its incorporation as a Director and Promoter. He passed the secondary school certificate examination held by the Maharashtra State Board of Secondary and Higher Secondary Education. He joined R.R. Industries in 2000 and has been its partner since 2002. Further, he has been the partner of S-Tech Industries since 2006. He is primarily involved in all aspects of the business of the Company, including new product development, crafting, and executing go-to market strategies. Sanjay Mansukhlal Rajani, aged 54 years, is the Whole Time Director and one of the Individual Promoters of the Company. He was sent up for the S.S.C. Exam from Shrimati Gokalibai P. P. High School. He joined R. R. Industries in 1985 and has been its partner since 2011. He is primarily involved in the production and product development of scholastic art and fine art materials in the Company.

Financials of DOMS Industries Limited IPO:

A. Balance Sheet
Particular (In Million) Mar-21 Mar-22 Mar-23
Equity Share Capital 3.73 3.73 3.73
Reserves 2,332 2,469 3,371
Borrowings 973 849 1,001
Trade Payables 568 811 870
Other Liabilities 698 842 1,153
Total Liabilities 2,239 2,502 3,024
Net Block 1,869 1,861 2,799
Capital Work in Progress 31 40 69
Investments 0 0 15
Other Assets 603 627 721
Total NC Assets 2,502 2,528 3,604
Receivables 419 492 356
Inventory 1,208 1,592 1,846
Cash & Bank 290 158 417
Other Assets 156 205 174
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Sales 4,028 6,836 12,119
Raw Material Cost 2,321 4,251 7,427
Purchases of Stock In Trade 116 137 261
Change in Inventory 16 -68 -55
Employee Cost 711 1,014 1,418
Other Expenses 564 804 1,201
Other Income 60 26 46
Depreciation 348 380 407
EBITDA 360 723 1,913
EBITDA Margin 8.94% 10.58% 15.78%
Interest 88 103 119
Profit before tax -76 240 1,388
Tax -16 69 359
Net profit -60 171 1,029
NPM (%) -1.47% 2.50% 8.46%
C. Cash Flow Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 323 748 1,924
Receivable -86 -57 135
Inventory 69 -384 -255
Payable -82 210 62
Loans And Advances -1 -1 -2
Other WC Items -49 26 214
Working Capital Changes -149 -207 154
Direct Taxes -22 -32 -345
Net Cash Inflow from Operating Activity 152 509 1,733
Cash from Investing Activity
Fixed assets purchased -230 -349 -1,363
Fixed assets sold 66 2 8
Investments purchased -32 -1 -10
Investment sold 0 0 0.3
Investment in subsidiaries -0.2 0 0
Other investing items 9 11 5
Net cash inflow from investing activities -187 -337 -1,359
Cash from Financing Activity
Proceeds from shares 0.23 0 0
Proceeds from borrowings 424 63 214
Repayment of borrowings -40 -179 -68
Intrest paid fin -63 -79 -108
Dividends paid 0 0 -56
Financial liabilities -51 -79 -74
Other financing items -21 -31 -32
Net Cash Flow 214 -134 250

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
DOMS Industries Limited 1212 103 16.95 46.6 790 4,794
Kokuyo Camlin Limited 775 24 2.44 42.0 168 1,683
Linc Limited 487 37 25.15 27.1 702 1,045
Navneet Education Limited 1,694 204 9.04 26.8 144 3,270
Flair Writing Industries Limited 942 118 12.66 33.7 377 3,976
* All the data is as per FY23.

Recommendation on DOMS Industries Limited IPO:

Review and Recommendation of DOMS Limited IPO by IZ is 6/10

Overview of DOMS Industries Limited

DOMS Industries Limited, a leader in India’s stationery and art products market, specializes in designing, developing, manufacturing, and selling an array of products under its flagship brand 'DOMS.' The company's presence extends across both domestic and international markets, backed by strong brand recognition.

Product Portfolio

DOMS categorizes its products into seven distinct categories: scholastic stationery, scholastic art material, paper stationery, kits and combos, office supplies, hobby and craft, and fine art products. Its core products, particularly pencils and mathematical instrument boxes, command significant market shares of 29% and 30% respectively. The company has demonstrated rapid growth, being the fastest-growing entity in its sector in India from Fiscal 2020 to Fiscal 2022.

Historical Background and Strategic Partnerships

Founded in 1973 as 'R.R. Industries,' DOMS has undergone various integrations, including the acquisition of 'S. Tech Industries.' A pivotal move in its growth trajectory was the strategic partnership formed with FILA, an Italian multinational in 2012, enhancing its international reach, R&D, and global distribution capabilities.

Manufacturing and Expansion Plans

DOMS operates advanced manufacturing facilities in Umbergaon, Gujarat, and Bari Brahma, Jammu and Kashmir. The company's vertical integration strategy encompasses the entire production process, from raw material procurement to finished goods. To bolster its growth strategy, DOMS has acquired additional land adjacent to its Umbergaon facilities.

Use of Issue Proceeds

The net proceeds from the Fresh Issue are earmarked for partly financing a new manufacturing facility, enhancing the production capabilities for writing instruments, watercolour pens, markers, and highlighters.

Risks and Challenges

DOMS faces several risks, including product concentration risk, with a significant revenue portion reliant on key products like wooden pencils. Its operational dependence on FILA for export sales and intense competition in the market are other notable challenges.

Management Team

Key management personnel include Gianmatteo Terruzzi, Chairman and Independent Director; Santosh Rasiklal Raveshia, Managing Director and Promoter; and Sanjay Mansukhlal Rajani, Whole Time Director and Promoter, each bringing unique skills and experiences to the company.

Financial Performance

The financials of DOMS show a steady increase in sales, raw material costs, and employee expenses over the years. The company has demonstrated an impressive EBITDA margin growth from 8.94% in March 2021 to 15.78% in March 2023. Net Profit Margin (NPM) has also significantly improved, turning around from -1.47% in March 2021 to 8.46% in March 2023.

Valuation Comparison

In comparison to peers like Kokuyo Camlin Limited, Linc Limited, Navneet Education Limited, and Flair Writing Industries Limited, DOMS Industries Limited appears to be on higher P/E.

Registrar of DOMS Industries Limited IPO:

  1. Link Intime India Private Limited

Company Address:

DOMS Industries Limited J-19, G.I.D.C, Opp. Telephone Exchange Umbergaon – 396 171, Dist. Valsad, Phone: +91 74348 88445 Email: Website

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