Doms Industries IPO Over Subscribed By 6.47x: Should You Subscribe?

DOMS Industries IPO opened for subscription on December 13 and is scheduled to close on December 15. Doms Industries IPO has received a lot of interest in its IPO. It was over-subscribed on the first day itself, led by interest from retail investors.

By 10:12 am on Thursday, the IPO had been oversubscribed by 6.47 times. Retail investors, in particular, have shown a remarkable response, with the retail portion being oversubscribed by 21.57 times. The Non-Institutional Investors (NII) portion was subscribed 9.10 times, and the Qualified Institutional Buyers (QIB) portion reached 6%. The Employee portion saw a subscription of 10 times.

So, with all this interest, should you invest in the IPO? Here’s what top domestic brokerages suggest.

Ventura has a “subscribe” rating on the IPO. The brokerage said that in FY23, the branded segment constituted a significant 36% share, equivalent to approximately ₹13,850 crores, of India’s stationery market. Projections indicate that this share is expected to further increase to around 43%, reaching approximately ₹30,500 crores by the fiscal year 2028.

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KRChoksey also has a “subscribe” rating for the IPO. The brokerage in its note highlighted that the company is the second-largest player in India’s branded ‘stationery and art’ products market, boasting a substantial market share of approximately 12.0% by value, as of FY23. The analysts also pointed out the strong domestic distribution network with over 120 super-stockists and more than 4,000 distributors. Complemented by a dedicated sales team of over 500 personnel, covering an extensive network of over 120,000 retail touchpoints across 3,500 cities and towns.

KRChoksey analysts said that a key factor contributing to their success is their diversified presence across various stationery categories and price points. This strategic positioning has propelled them to be the fastest-growing company in the stationery and art material products segment in India, in terms of revenue growth over the period from FY20 to FY23.

Analysts at Hem Securities also recommend investors to “subscribe” to the IPO. The brokerage pointed out that along with its market leader position, the company has a strong manufacturing infrastructure. The company operates 13 manufacturing facilities located in Umbergaon, Gujarat, covering approximately 34 acres of land and encompassing around 1.18 million square feet. These facilities are recognized as one of the largest in India for stationery manufacturing. As of March 31, 2023, the company’s annual installed capacity for its key products stood at 4,734.93 million units.

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