DCX Systems Ltd. IPO
DCX Systems Ltd.
IPO Listing Details
Listed On
BSE & NSE
Listed On
Issue Price
₹207
Issue Price
Listing Price
₹286
Listing Price
Listing Gains
+₹79.25 (+38.29%)
Listing Gains
IPO Details
Bidding Dates
31 Oct - 02 Nov '22
Bidding Dates
Min. Investment
₹14,184
Min. Investment
Lot Size
72.00
Lot Size
Price Range
₹197 - ₹207
Price Range
Issue Size
476 Cr
Issue Size
Subscription Rate
- Retail Individual Investor61.77x
- Non-Institutional Investor43.97x
- Qualified Institutional Buyers84.32x
- Employees
About Company
DCX Systems Ltd, the Bengaluru-based manufacturer of electronic sub-systems and cable harnesses, will float its initial public offering (IPO) on October 31. The company is a preferred Indian Offset Partner (IOP) for foreign original equipment manufacturers (OEMs) in aerospace and defence manufacturing projects.
The company commenced its operations in 2011. It is engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies. In 2020, the company commissioned a new manufacturing facility at the Hi-Tech Defence and Aerospace Park SEZ in Bengaluru, Karnataka.
DCX Systems had 26 customers in Israel, the United States, Korea and India as of June 30, 2022. These customers include certain Fortune 500 companies, multinational corporations, domestic and international OEMs, start-ups, and private and public sector companies in India across different sectors.
DCX Systems IPO opens for subscription on October 31 and closes on November 2. The price band for the offer is fixed between Rs 197 - 207 per equity share of face value Rs 2 each. The Rs 500-crore IPO includes a fresh issue of Rs 400 crore comprising 1.93 – 2.03 crore equity shares and an offer for sale (OFS) of equity shares worth Rs 100 crore by promoters and selling shareholders.
The company proposes to utilise the proceeds from the fresh issue for certain purposes, including Rs 110 crore for the prepayment/repayment of debt; Rs 160 crore to fund the working capital requirement and another Rs 44.9 crore to invest in a wholly owned subsidiary, Raneal Advanced Systems to fund its capital expenditure expenses. The proceeds from the OFS portion will entirely go to the promoters.
Important Dates - DCX Systems Ltd IPO
| Application opens on | 31st October 2022 |
| Last date of application | 2nd November 2022 |
| Date of Allotment | 7th Novemberber 2022 |
| Refund begins from | 9th Novembber 2022 |
| Credit of shares to Demat | 10th November 2022 |
| Listing date | 11th November 2022 |
Financial Snapshot -DCX Systems IPO
DCX Systems has seen robust growth in business and financial performance over the years. The company’s revenue and net profit registered a CAGR of 57% and 159%, respectively, led by an increase in the system integration business, while the EBITDA margin expanded from 1.4% in FY20 to 6.1% in FY22.
| Financial Year | Total Assets | Total Revenues | Net Profit |
|---|---|---|---|
| March 2020 | Rs 698.85 crore | Rs 449.2 crore | Rs 9.74 crore |
| March 2021 | Rs 793.18 crore | Rs 641.1 crore | Rs 29.56 crore |
| March 2022 | Rs 942.61 crore | Rs 1,102.2 crore | Rs 65.61 crore |
Why should you invest in DCX Systems Ltd. IPO?
DCX Systems is one of the leading manufacturers of electronic sub-systems and cable harnesses in India. Being a preferred Indian offset partner, the prospects of DCX Systems look bright with the “Make in India”, “Atmanirbhar Bharat”, liberalized policies and other initiatives to boost the defence sector in India. The company also has steady financial performance with a strong order book and seems well-positioned to capitalize on industry tailwinds.
DCX Systems Ltd IPO Noteworthy Highlights
Here are some of the key details and information about DCX Systems IPO before investing:
- DCX Systems’s IPO lot size is 72 shares, and a retail-individual investor can apply for up to 13 lots. This will make his total investment of 936 shares or Rs 1,93,752.
- The book-running lead managers (BRLM) to the DCX Systems IPO are Axis Capital, Edelweiss Financial and Saffron Capital Registrar.
- The promoter shareholding in the company after the issue will decline by 24.61% to 73.58% from the current 98.19% stake held by them.
- DCX Systems already raised Rs 225 crore from 12 anchor investors on October 28, ahead of the public issue opening. The company finalized the allocation of 1.08 crore equity shares to anchor investors at a price of Rs 207 per share.
DCX Systems IPO Grey Market Premium
| Date | GMP |
|---|---|
| 31st October | Rs.70 |
| 29th October | Rs.80 |
DCX Systems Ltd. IPO - SWOT Analysis
Strengths
DCX Systems has a strong order book of Rs 2,563.63 crore at the end of June 2022 to be executed in FY2023 to FY2025. The company is a preferred IOP for foreign OEMs for executing defence manufacturing projects.
It is also one of the largest IOP for ELTA Systems Ltd and Israel Aerospace Industries Ltd, System Missiles and Space Division (together, the “IAI Group”), Israel, for the Indian defence market for the manufacture of electronic sub-systems and cable and wire harness assemblies.
Weaknesses
The company is dependent on certain select customers for a majority of its revenue, with the top customer accounting for 55.62% of FY2022 consolidated revenue. The top 3 customers account for 80.55% of the company’s revenue, and the top 10 customers account for 99.71% of revenue. Hence, any loss of business or profitability from its top customers will impact the financial performance of the company. The company had negative cash flows from operating activities in FY2022.
Opportunities
DCX Systems operates in a growing Indian landscape for defence and aerospace services. Many initiatives, like the increase in foreign direct investment (FDI) in the Indian defence sector to 74% under the automatic route, the announcement of the indigenous development of defence systems and sub-systems and instating of defence industry corridors across Uttar Pradesh and Tamil Nadu is expected boost the defence manufacturing in the country and improve the market growth dynamics. DCX has the opportunity to capitalize on the expected growth in this space.
Threats
Any changes in the offset defence policy or a decline or re-prioritization of funding in the Indian defence budget pose a threat to the company’s growth. Moreover, delays or disruptions in the supply of raw materials, especially during the recent global geopolitical uncertainty, could affect the performance of the company.
DCX Chol, one of the group companies, was proposed to be debarred for product quality deficiency and defaults in delivery of products by the Defence Logistics Agency of the USA on June 17, 2021.
How to apply for DCX Systems Ltd. IPO?
You can apply for the DCX Systems Ltd. IPO in these ways:
UPI
Link your personal bank A/C to a trusted UPI ID and map it with your TradeSmart account. Now, proceed further to book your IPO. On acceptance of the mandate, the bid amount will get blocked in your bank account Learn more.
Demat Account
1. If you are an Existing TradeSmart demat account holder and wish to apply for an DCX Systems Ltd. click here.
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