IPO Note - Dixon Technologies

Issue Open: Sep 6, 2017 - Sep 8, 2017.
Face Value: Rs 10 Per Equity Share.
Issue Price: Rs 1760 - Rs 1766 Per Equity Share.
Market Lot: 8 Shares 
Minimum Order Quantity: 8 Shares 
Listing At: BSE, NSE.
Expected date of Listing : On or before 18th Sept.

Dixon Technologies Incorporated in 1993, Dixon Technologies is engaged in manufacturing products in the consumer durables, lighting and mobile phones markets.
Portfolio of the manufacturing products are :

1. Consumer electronics like LED television panels.
2. Home appliances like washing machines.
3. LED bulb, tube lights, CFL bulbs etc.
4. Mobile phones.

Dixon is leading manufacturer of lighting products of CFL, LED bulbs, LED TVs and semi-automatic washing machines in India. Dixon manufacture products for popular retail brands including Panasonic, Philips, Haier, Gionee, Surya Roshni, Reliance Retail, Intex Technologies, Mitashi and Dish.

Dixon is also a leading Original Design Manufacturer (ODM) in India. Company develop and design products in-house at its R&D facility. The ODM business contribute over 25% of its revenue.

Company have six manufacturing facilities located in the states of Uttar Pradesh and Uttarakhand.

Ahead of its IPO, the company has already raised Rs.179.79 crore by selling shares to institutional investors from the so-called anchor book allocation include Steadview Capital Mauritius Ltd, DSP Blackrock, Kuwait Investment Authority, Goldman Sachs India Fund, Franklin Templeton Mutual Fund, HSBC MF, Nomura Funds, HDFC MF, Birla Sunlife MF, SBI MF, ICICI Prudential AMC and Kotak MF.
Motilal Oswal holding nearly 5% Stake in the company.

At the higher price band of Rs1,766, the stock is valued at 39.7 price to earnings (PE) on FY17 basis. 
Thus slightly overvalued. But the company recorded a revenue at a compounded annual growth rate (CAGR) of 34%, mainly due to a sharp jump in sales of the mobile segment. “EBITDA margin remains volatile owing to addition of low margin products and higher employee cost. DTL recorded net profit CAGR of 78% in FY13-17 owing to sharp sales growth. Lower capex requirement on assembling capacity has translated to higher asset turnover, which, in turn, drives the return ratios of the company.

We recommend to apply for the IPO.

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