Divgi TorqTransfer Systems is one of the few Indian firms that manufactures and supplies transfer case systems and dual-clutch automatic transmissions (DCT) to Indian car OEMs. They are the only Indian company that supplies transfer cases to worldwide OEMs.
The company’s earnings in the March FY22 quarter were 46.15 crore, up 21.3% from the previous year. During the same time period, revenue from operations increased by 25.3% to 234 crore, with the top five customers contributing 213.4 crore. EBITDA (earnings before interest, tax, depreciation, and amortization) climbed by 26.4% to 65.6 crore, with a margin rise of 25 basis points to 28.06% from FY21. The company achieved a profit of Rs 25.66 crore against sales of Rs 133.72 crore in the six-month period that ended on September 30, 2022.
Fortunately, the company has reduced its borrowings from 50.41 crore in FY20 to 0.26 crore in FY21. It had a borrowing of 0.5 crore as of September 30, 2022. They manufacture and supply a variety of products under the broad categories of
- Torque transfer system for four-wheel and all-wheel drive
- Synchroniser system for manual transmission and DCT
- Transmission system for EVs
- Rear wheel drive manual system
Divgi TorqTransfer Systems Ltd. IPO Objective
- To fund capital expenditure requirements to buy equipment/machinery for their manufacturing facilities and meet general corporate purposes.
Divgi TorqTransfer Systems Company Financials
| Parameters | Year ending on As on 31st March, 2022 | Year ending on 31st March, 2021 | Year ending on 31st March, 2020 |
|---|---|---|---|
| Revenue from operation | 2337.77 | 1865.75 | 1590.65 |
| Profit After Tax | 461.51 | 380.44 | 280.39 |
| EBITDA | 656.13 | 518.99 | 369.35 |
| Current Assets | 2,635.45 | 2,496.11 | 609.92 |
| Current Liabilities | 598.76 | 609.92 | 886.22 |
Why should you invest in the Divgi TorqTransfer Systems Ltd. IPO?
Here are your top reasons to invest in the IPO.
- It is one of the few Indian companies to have served both systems-level solution providers and component kit suppliers to global OEMs and Tier-I transmission systems suppliers.
- The management has thirty-plus years of experience in the automotive industry.
- They offer turnkey solutions and components to automotive OEMs across India, the USA, China, Korea, Russia, and others.
- They cater to a domestic and global clientele of marquee customers.
Strengths
- Strategically located manufacturing facilities capable of manufacturing high-precision components meeting system-level design intent.
- They offer turnkey solutions and components to automotive OEMs across India, the USA, China, Korea, Russia and others.
- They cater to a domestic and global clientele of marquee customers.
Risks
- Their business is concentrated on the top five customers. So a loss of any customer will impact their business adversely.
- Price volatility of raw materials and components can adversely affect the company’s future revenue.
- To stay competent they must quickly anticipate and adapt to the changing demands of their customers.
Divgi TorqTransfer Systems Ltd. Noteworthy Highlights
- Their top five customers contributed 91.28%, 92.86%, and 86.94% of total revenue in the last three fiscal years of 2022, 2021, and 2020 respectively.
- Between 2020 and 2022 fiscals, the company recorded a 28.30% CAGR in their profit after tax (PAT).
- The Indian EV market is expected to grow by 108-110% CAGR from 2021-2026 in volume and value.
Competitive Peers
| Company Name | P/E ratio | EPS (Basic) | NAV per equity |
|---|---|---|---|
| Divgi TorqTransfer Systems Ltd. | NA | 16.76 | 123.50 |
| Sona BLW Precisions Foreigners Ltd. | 83.00 | 6.22 | 34.23 |
| Bosch Ltd. | 40.99 | 413.10 | 3,621.05 |
| ZF Commercial Vehicle Control Systems India Ltd. | 126.83 | 74.90 | 1,114.57 |
| Sundram Fasteners Ltd. | 41.51 | 21.74 | 125.46 |
| Endurance Technologies Ltd | 44.89 | 32.75 | 278.66 |
Divgi TorqTransfer Systems IPO FAQs:
Q1. What is Divgi TorqTransfer Systems Ltd. IPO?
Ans. Divgi TorqTransfer Systems Ltd. SME IPO opens on march 1, 2023. The offer comprises fresh equity shares worth ₹180.00 crore and an offer for sale of 3,934,243 scripts at a face value of ₹5.
Q2. When will Divgi TorqTransfer Systems Ltd. IPO allotment be available?
Ans. The IPO shares of Divgi TorqTransfer Systems Ltd. will be allotted on March 09, 2023.
Q3. What will be the Divgi TorqTransfer Systems Ltd. IPO lot size?
Ans. One lot of Divgi TorqTransfer Systems Ltd. IPO has 25 shares.
Q4. When will Divgi TorqTransfer Systems Ltd. IPO open for subscription?
Ans. The IPO will open on March 01, 2023.
Q5. What minimum lot size can retail investors subscribe to?
Ans. Retail investors can apply for a minimum of one lot.
Q6. When will Divgi TorqTransfer Systems Ltd. list on exchanges?
Ans. The shares will list on the BSE and NSE exchanges on March 14, 2023.
Q7. What would be the listing gains on the Divgi TorqTransfer Systems Ltd. IPO?
Ans. Listing gain is the difference between the IPO’s opening and offer prices. The listing gain is a result of changing investors’ interests, global parameters, and short vs long-term outlooks.
Q8. I have finished the application process for the Divgi TorqTransfer Systems Ltd. IPO, but the funds are not yet debited. What is the reason?
Ans. The bank initially blocks the amount you bid for an IPO. It will debit the amount when the shares get allotted or unblock it after the UPI mandate expiry date.
Q9. How to approve the UPI mandate request for Divgi TorqTransfer Systems Ltd. IPO?
Ans. Login to your UPI handle and approve the payment mandate to complete the IPO application process.
Q10. Can I submit more than one application for the public issue of Divgi TorqTransfer Systems Ltd. using one PAN?
Ans. You can submit only one application using one PAN card.
Q11. What is the minimum order quantity for Divgi TorqTransfer Systems Ltd. IPO?
Ans. The minimum size of the application will be one lot of 25 shares.
