Dixon Technologies Looking To Raise 600 Crore Through Its IPO

Dixon Technologies (India) Ltd., manufacturer of consumer electronics and lighting products, is looking to raise as much as Rs 600 crore through an initial public offering.

The offer will allow Motilal Oswal Financial Services Ltd.’s, two private equity arms, India Business Excellence Fund or IBEF and IBEF – I, to make 15 times its investment nine years after it first picked up stake in the company. Motilal Oswal’s private equity arms invested in Dixon at an average price of Rs 121 per share.

About The IPO

The price band for the offer, which is a combination of fresh issue and offer for sale, has been fixed at Rs 1,760-1,766, according to its draft red herring prospectus.

The issue will open on September 6 and close on September 8. Promoter Sunil Vachani and seven investors are looking to sell 30.5 lakh equity shares, amounting to Rs 540 crore at the upper end of the price band, while 3.4 lakh equity shares worth Rs 60 crore will be in the form of fresh issuance, the draft prospectus said.

The company will use the proceeds of the issue to repay debt, set-up an LED manufacturing unit, strengthen the lighting products vertical, upgrade information technology infrastructure and for general corporate purposes.

IDFC Bank, IIFL Holdings, Motilal Oswal Investment Advisors and Yes Securities are the book running lead managers to the issue.

Business

Dixon Technologies manufactures consumer electronics products such as LED TVs, home appliances such as washing machines, lighting products such as LED bulbs and tube lights, down lights and CFL bulbs; and mobile phones.

It also provides solutions in reverse logistics, that is, repair and refurbishment services of set-top boxes, mobile phones and LED TV panels. Dixon is the leading manufacturer of lighting products of CFL, LED bulbs, LED TVs and semi-automatic washing machines in India, according to a Frost & Sullivan Report.

Financial Highlights

• Consolidated net worth of the company stood at Rs 198 crore, as of March 31, 2017.
• Total consolidated revenue grew at a compounded annual growth rate (CAGR) of 34 percent while the bottomline expanded by 78 percent over the past five years.
• The company has a total debt of Rs 65 crore, while the debt-to-equity stood at at 0.3 times as of March 31, 2017.
• Earnings per share (EPS) at the upper end of the price band stands at Rs 44.5, after the issue of fresh shares. The price-to-earnings ratio stands at 39.7 times for financial year 2016-17, shows data compiled by BloombergQuint.

(An earlier version of this story erroneously stated that the IPO will open on August 30)