DOMS IPO: A Closer Look at the Indian Stationery Giant

Introduction

India’s financial markets have been witnessing a roller coaster ride recently, with a flurry of IPOs hitting the main boards and SME segments. In this blog, we will dive into the details of one such IPO – Doms, the Indian unit of the Italian stationary giant. We will explore Doms’s strengths, weaknesses, financials, and IPO details to gain a better understanding of this market leader in the stationery and art products industry.

The Journey of Doms

Domska’s roots can be traced back to 1973 when it was established by Prasiklal Amritlal Ravishia and Mansuklal Jamnadas Rajni Kampni. They started with the production of pencils and crayons, gradually expanding their product range to include page and executive pads. This led to the launch of Doms, the flagship brand of the company, offering a wide range of stationery and art products.

Product Categories and Market Presence

Doms operates in various categories, such as scholastic stationery, scholastic art materials, paper stationery kits and combos, office supplies, and hobby and craft or fine art products. In the financial year 2023, the company achieved gross product sales of INR 1231.73 crore, with scholastic stationery contributing 46.18% and scholastic art materials contributing 23.77% to the overall sales. Doms offers over 3800 products, including a diverse range of fine art products under its sub-brand, Polymer Pencils Klea C three, and adhesive products under Klea Fixifix. Doms has carved a niche for itself in the Indian market, capturing a 12% market share by value. The company operates through a vast network of 120 super stockists, 4000 distributors, and over 1,20,000 retail points in more than 3500 cities. In addition to traditional channels, Doms also sells its products through its e-commerce website. The company has established partnerships with educational and corporate bodies to supply stationery and art materials in bulk. Moreover, Doms has expanded its international reach through a strategic partnership with Fila, an Italian creativity icon, to market and distribute its products in selected international markets.

Strengths and Weaknesses

Doms’s key strengths lie in its extensive network, market presence, and strong partnerships. The company has a wide range of high-demand products and focuses on market positioning and shelf space enhancement. With its healthy financial risk profile and strong capital structure, Doms has been able to effectively manage its debts and maintain a stable financial position. The company’s interest coverage ratio of 15 times in the financial year 2023 reflects its strong debt servicing capability. However, Doms is not without its challenges. The stationary industry heavily relies on raw materials like polymer and graphite, making it susceptible to fluctuations in raw material prices. These fluctuations can impact the company’s profit margins and financial stability. Moreover, the Indian stationery industry is highly competitive and fragmented, with numerous unorganized players operating in the lower-end product segments. Doms faces intense competition from these players, particularly in the pens, pencils, and adhesives segments.

Financial Performance

Doms’s financial performance has been impressive, with consistent growth in revenue over the years. From INR 409 crore in the financial year 2021, the company’s revenue increased to INR 686 crore in the financial year 2022 and further jumped to INR 1217 crore in the financial year 2023. The company’s profit after tax also witnessed a consistent rise, from INR 6 crore in the financial year 2021 to INR 103 crore in the financial year 2023. Key financial ratios also indicate Doms’s healthy financial position. The company boasts an EBITDA margin of 15.4% and a net profit margin of 8.49%. Its price-to-earnings (PE) ratio of 43.19 is higher than the industry average of 35.98, reflecting market confidence in its performance. Doms’s net debt to equity ratio of 0.28 indicates manageable debt levels, and its return on equity (RoE) stands at 33.5%, higher than the industry’s RoE of 33.31%. The company has achieved a two-year sales compound annual growth rate (CAGR) of 72.5% from the financial year 2021 to 2023.

IPO Details

Doms’s IPO opened on 13th December 2023 and will close on 15th December 2023. The price band for the IPO is set at INR 750 to INR 790, with a lot size of 18 shares. The issue size comprises a fresh issue of shares worth INR 350 crore and an offer for sale worth INR 850 crore. The IPO is set to list on 20th December 2023.

Conclusion

Doms, the Indian unit of the Italian stationary giant, has established itself as a market leader in the stationery and art products industry. With its wide range of products, extensive network, and strategic partnerships, the company has captured a significant market share. Despite facing challenges from raw material price fluctuations and intense competition, Doms has maintained a robust financial position and witnessed consistent growth in revenue and profit. The company’s IPO presents an opportunity for investors to participate in the success story of this market leader. Disclaimer: Investment in securities market is subject to market risks. Readers are advised to read all the related documents carefully before investing. The information provided in this blog is for educational purposes only and should not be considered as a buy or sell recommendation.

Disclaimer: The information is only for information purpose only. It is always recommended to consult with certified financial experts before making any investment decisions. Follow busymoneyfreak.com