Dhoot Transmission IPO: Rs 30.67 Billion Issue Opens Aug 10

Dhoot Transmission aims to raise Rs 30.67 billion through its Initial Public Offering (IPO), launching from August 10 to August 12, 2026. This move comes despite a general slowdown in India’s IPO market during 2026.

The electrical and electronics company specializes in wiring harnesses and electrical distribution systems for both internal combustion engine (ICE) and electric vehicles (EVs).

Key Financials and IPO Details

• IPO size: Rs 30.67 billion
• Fresh Issue: Rs 14 billion
• Offer for Sale (OFS): Rs 16.67 billion
• Market Share (2W/3W wiring harness, FY25): 44.64% by value
• Market Share (Electric 2W/3W wiring harness): Over 70% in India
• 2-year Revenue CAGR: 27.2%
• 2-year Net Profit CAGR: 15.3%
• Earnings Per Share (EPS): Rs 24.31
• Return on Net Worth (RoNW): 36.18%
• Grey Market Premium (GMP): Rs 250, suggesting a potential 29% listing gain.

Funds from the fresh issue are allocated for repaying existing borrowings and infusing capital into subsidiaries for loan repayment. The company also plans to establish two new manufacturing plants in Haryana and Tamil Nadu, pursue potential acquisitions, and cover general corporate purposes.

Risks and Mitigation Strategies

The IPO faces key risks, including high dependence on a limited number of major customers and the absence of long-term order commitments from Original Equipment Manufacturers (OEMs). These factors could impact future revenue and profitability.

Dhoot Transmission plans to mitigate these risks by expanding its product portfolio and strengthening research and development. Other strategies include improving manufacturing efficiency and pursuing strategic partnerships to secure its market position.

Given the projected growth of India’s auto ancillary sector, Dhoot Transmission’s market leadership and robust financials present a notable investment opportunity despite identified risks.