Electronic sub-systems and cable harness manufacturer DCX Systems would delight their investors at market debut on 11th November, expecting a listing premium of around 35-40% at an issue price of Rs 207.

A positive equity market environment, reasonable valuations, vigorous demand from investors for the Initial Public Offering (IPO), rising demand for the aerospace and defence parts with reliable CAPEX by the Government’s Atmanirbhar Bharat initiative, and strong financial performance results from the expected strong listing premium.

According to them, DCX Systems’ shares traded at a 36-41% premium in the grey market. The grey market is an unofficial trading platform investors use to gauge the expected IPO listing price.

The DCX Systems IPO received a stellar reply from investors. It was oversubscribed 69.79 times, retail investors attempting for 61.77 times the allocated quota, non-institutional investors 43.97 times, and the earmarked portion of Qualified Institutional Buyers (QIBs) oversubscribed 84.32 times.

The public issue elevated the chosen Indian offset player for the defence and aerospace industry to Rs 500 crore. The price band for the offer was Rs 197-207 apiece.

Its product portfolio is supported by systems integration and manufacturing capabilities, helping its order book from Rs 1,941.31 crore as of March 2020 to Rs 2,369 crore as of March 2022. As of June 2022, the order book encompassed 42 orders worth Rs 2,563.63 crore, executing projects over the financial years 2023 to 2025.

Its revenue from operations surged at Compounded Annual Growth Rate (CAGR) of 56.64% during FY20-FY22 to Rs 1,102.27 crore, while profit doubled to Rs 65.6 crore in FY22.

The operating performance was robust, with Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) rising to Rs 66.99 crore in FY22, from Rs 10 crore in FY21, and margin intensifying to 6.08% from 1.57% in the same period.