The DOMS IPO, valued at Rs 1,200.00 crores, comprises a fresh issue of 0.44 crore shares worth Rs 350.00 crores and an offer for sale of 1.08 crore shares valued at Rs 850.00 crores. This book-built issue combines both components to raise capital, with the fresh issue accounting for Rs 350.00 crores and the offer for sale contributing Rs 850.00 crores, totaling the IPO's valuation at Rs 1,200.00 crores.

Bidding for the DOMS IPO commenced on December 13, 2023, concluding on December 15, 2023. Allocation for the IPO was settled by Monday, December 18, 2023, and subsequently, the shares were listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on December 20, 2023.

The IPO price range for DOMS is established between ₹750 to ₹790 per share, with a minimum application lot size of 18 shares. Retail investors need to commit a minimum investment of ₹14,220. Qualified non-institutional investors (sNII) are required to invest in a minimum of 15 lots (270 shares), totaling ₹213,300, while big non-institutional investors (bNII) must invest in at least 71 lots (1,278 shares), totaling ₹1,009,620.

JM Financial Limited, BNP Paribas, ICICI Securities Limited, and IIFL Securities Ltd serve as the book running lead managers for the DOMS IPO, with Link Intime India Private Ltd acting as the registrar for the issue.

Objective of IPO.

The offer is both “offer for sale” and “fresh issue”

Offer For Sale: - Rs. 850 Cr.

Fresh Issue: - Rs. 350 Cr.

The fresh funds will be used in the following manner:

1. Proposing to part finance the cost of establishing a new manufacturing facility to expand its production capabilities for a wide range of writing instruments, water colour pens, markers and highlighters, Dehri, Tal: Umbergaon, District Valsad, 396170, Gujarat, India (“Proposed Project”)
2. General corporate purposes.

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About DOMS Limited

Doms design, develop, manufacture, and sell a wide range of stationery and art products, primarily under flagship brand ‘DOMS’, in the domestic market as well as in over 45 countries internationally covering the Americas, Africa, Asia Pacific, Europe, and Middle East

They are the second largest player in India’s branded ‘stationery and art’ products market, with a market share of ~12% by value, as of Fiscal 2023.

Their keen focus on research and development (R&D), product engineering, and backward integrated manufacturing, operations, combined with multichannel pan-India distribution network has enabled them to achieve a strong brand recall amongst consumers. The company is vertically integrated with operations such as procurement of raw materials, moulding, assembling, integration of sub-assemblies into finished products which has enabled them to gain a competitive advantage by improving productivity and reducing costs.

Domestic distribution network for general trade comprises of over 120 super-stockists, and over 4,000 distributors along with a dedicated sales team of over 500 personnel covering more than 120,000 retail touch points over 3,500 cities and towns.

The stationery and art materials industry deals in a wide range of products & categories, comprising paper products, writing instruments, computer stationery, school stationery, office stationery, stationery adhesives and art & craft products among others. The global market is valued at USD192 bn in CY22 and expected to reach USD220 bn by CY27, registering CAGR of 2.8% as compared to 2.0% from CY16-CY22.

Whereas in India market has exhibited continuous growth over the years. An estimated size of INR 38,500 cr. FY23 witnessing a sales dip in FY21 due to Covid. The market bounced back with 35% growth in FY22 due to revival in demand post reopening. The Indian stationery and art materials market is expected to grow at a CAGR of ~13% during FY23-28 period to reach INR 71,600 cr. by FY28.

Asia Pacific holds the dominant share of the stationery and art materials product market followed by North America. In the year 2020, Asia and North America combined captured approximately 60% to 62% of the market for stationery products.

The market share of these regions has increased over the two years and is estimated to capture approximately three fourth (~75%) of the global stationery and art materials market in the year 2022.

The demand for stationery products is growing rapidly worldwide, driven by increased literacy rates and education levels. India can capitalize on this demand by producing a diverse range of stationery products at competitive prices. Further, India has a vast availability of raw materials like paper, rubber, plastic, and wood, and also has a competitive advantage in cost-effective manufacturing due to lower labour costs.

Risk Analysis.

1. The company is dependent on our ‘general trade’ distribution network for a significant portion (more than 70.00%) of our Gross Product Sales.
2. Product concentration risk: The company derives a significant portion (approximately 60%) of the gross product sales from the sale of critical products, and a considerable amount (more than 30%) of the gross product sales in fiscal 2023 is attributable to the sale of ‘wooden pencils.’Any decline in the sale of any essential product will harm the business, results of operations, and financial condition.
3. One of the listed peers has filed an outstanding civil litigation against the company.
4. Dependence on FILA for export sales – The company depends on the FILA Group for export sales (export sales to FILA group contribute to more than 60% of the total export sales).
5. The Company have not entered into any formal contracts or exclusive arrangement with suppliers from whom they procure materials consumed for manufacturing process. Further, they are dependent on certain limited suppliers for raw materials.
6. The company operates in a highly competitive industry where there can be no single winner.
7. Success depends on our ability to promptly identify and respond to changing consumer preferences or evolving trends and successfully launch new products or stock keeping units in the market.
8. The net proceeds include part financing the cost of establishing the Proposed Project which may be subject to the risk of unanticipated delays in implementation, cost overruns and other risks and uncertainties.
9. Deterioration of the brand image, coupled with the presence of look-alikes and counterfeit products in the domestic market, could negatively impact the company's goodwill and operational results.
10. The company faces a risk of depletion of natural resources, considering some raw materials are natural. The lack of formal contracts with suppliers and dependence on a limited number of them for specific raw materials pose challenges to the company's procurement process.
11. An increase in the costs of raw materials or inability to fully pass on costs to customers may impact revenue from operations. Maintaining a high level of inventory.
12. Fragmented industry with unorganized players followed by low entry barrier gives the company more competition in the domain.