Pencil-maker Doms sets ₹750-790 price band for ₹1,200 crore IPO

DOMS said the IPO issue comprises ₹850 crore of Offer For Sale and ₹350 crore of fresh issue and will close on December 15. 
| Photo Credit: Photo Courtesy: https://domsindia.com

The second largest pencil-maker Doms Industries on December 7 set a ₹750-790 price band for its ₹1,200 crore initial share sale that’s opening on December 13.

The Umbergaon, Valsad-based company, said the issue comprises ₹850 crore of Offer For Sale (OFS) and ₹350 crore of fresh issue and will close on December 15. Its chief financial officer Rahul Shah told reporters in Mumbai that the floor price is 75 times and the cap price is 79 times the face value of the equity shares.

The OFS will have its single largest shareholder Fila of Italy selling shares worth ₹800 crore from its 51% holding and promoter families diluting shares worth ₹50 crore-₹25 crore each by Sanjay Mansukhlal Rajani who is a director of the company and ₹25 crore by Ketan Mansukhlal Rajani who is whole-time director.

This offer also includes a reservation of shares aggregating up to ₹5 crore for subscription by eligible employees which will be issued at a discount of ₹75 per share.

The company will use proceeds to part finance the ₹453.57 crore capex for setting up a new manufacturing facility to expand production capabilities for a wide range of writing instruments, water colour pens, markers and highlighters, in Umbergaon where it already has multiple units.

Post-issue, Fila (Fabbrica Italiana Lapis ed Affini), which owns 51% and has invested close to ₹300 crore since 2012, will continue to be the single largest shareholder and together with the Italian partner, the promoters will hold 75% equity.

Santosh Raveshia owns 17% of the company, Sanjay Rajani and Ketan Rajani own 8.63% each; and Chandni Vijay Somaiya, Sejal Santosh Raveshia and Sheetal Hiren Parpani hold 4% each.

Interestingly, the coastal town Umbergaon in the Valsad district of Gujarat is known as the pencil town of the country as it is home to the two largest players — Hindustan Pencils, which controls around 40% of the market and Doms controlling 30%.