DCX Systems makes a flying start on the stock market, trading up 47% from the issue price
DCX Systems, a Bengaluru-based electronic subsystem and wire harness manufacturing company, made its public debut on Friday. It is currently trading at Rs 304.4 each on BSE, a premium of around 47% to its issue price of Rs 207. The listing premium is in line with the gray market premium trend .
In the first quotation on Friday, DCX Systems opened at Rs 286.25 each on the BSE, against the issue price of Rs 207. It touched its high of Rs 304.85 and a low of Rs 286 .25 at the start of the trade.
Pravesh Gour, senior technical analyst at Swastika Investmart, said, “The company’s strong listing can be attributed to unattractive levels of investor subscription. As the company has been able to create long-term, deep-rooted relationships with its customers through its ability to execute on time and cost, its ability to maintain confidentiality, and its experienced management team.
Gour, however, said the company was concerned about a heavy reliance on key customers, with the majority of revenue coming from a low margin built to print offset defense contracts, the regulated nature of the industry , high debt to equity and high working capital requirements. . “Therefore, we advise investors to lock in listing gains and only aggressive investors should consider making a long-term commitment to the company. Those who have requested listing gains can hold a stop loss of Rs 245. »
The DCX Systems IPO was open for public subscription from October 31 through November 2. On the last day, the IPO was subscribed 69.79 times, receiving bids for 101.27 crore of shares against 1.45 crore of shares on offer. While the share of qualified institutional buyers was subscribed 84.32 times, the share of non-institutional investors was subscribed 43.97 times. The retail part also had good participation and was subscribed 61.77 times.
At least 75% of the IPO was reserved for qualified institutional investors, up to 15% for high net worth individuals and 10% for retail investors.
The IPO consists of the issuance of new shares worth Rs 400 with a par value of Rs 2 each. Promoters and existing shareholders will sell shares worth Rs 100 crore via an offer of sale (OFS).
The company proposes to use the net proceeds of the new issue for the payment of debt, the financing of working capital requirements, the investment in its wholly-owned subsidiary Raneal Advanced Systems to finance its capital expenditures and company generals.
DCX mopped up Rs 225 crore from its anchor book on October 28, ahead of the public issuance opening. A total of 12 investors participated in the anchor book and the company finalized the allotment of 1.08 crore shares to anchor investors at a price of Rs 207 per share, which is at the upper end of the price range.
On Friday, the benchmark Sensex shares jumped 1,034.01 points, or 1.71%, to a 52-week high of 61,647.71 in early trading. On similar lines, the wider NSE Nifty also jumped 293.15 points to 18,321.35. Among Sensex’s 30 stocks, all stocks except Mahindra and Mahindra were in the green.
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