December 12, 2023
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DOMS IPO Guidance: Apply with Full force
It requires guts, strong determination and managements skills to develop India’s No.1 Stationary company from the small town of Umbergaon in Gujarat. Yes, we are talking about DOMS Industries which at present is 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, in the domestic market as well as in over 45 countries internationally. The company offers well-designed and quality ‘stationery and art material’ products to consumers, which we classify across seven categories: (i) scholastic stationery; (ii) scholastic art material; (iii) paper stationery; (iv) kits and combos; (v) office supplies; (vi) hobby and craft; and (vii) fine art products.
Moreover the company has the widest breadth of product categories amongst our peers in India and
are amongst the few ‘stationery and art material’ products manufacturing and marketing companies globally with such a wide product breadth. Among other factors, its presence across multiple such categories and price points has enabled it to be the fastest growing ‘stationery and art material’ products company in India in terms of revenue over the period from Fiscal 2020 to Fiscal 2023.
The company has lineage back to 1973, with the formation of a partnership firm, ‘R.R. Industries’ by its founders, late Rasiklal Amritlal Raveshia and late Mansukhlal Jamnadas Rajani, which over the years undertook the business of manufacturing and sale of pencils and crayons.
In 2012, the Company entered into a strategic partnership with FILA, a listed Italian multinational
company, engaged in the supply of various ‘art materials’ and ‘stationery products’, with a global presence.
Its products are marketed under its flagship brand ‘DOMS’ along with other brand/sub-brands including ‘C3’, ‘Amariz’, and ‘Fixyfix’. While ‘wooden pencils’ is its largest product in terms of revenue, contributing 31.66% and 32.49% to our Gross Product Sales amounting to Rs.3,899.88 million for Fiscal 2023 and Rs. 2,524.07 million for the six months period ended September 30, 2023 respectively.
It undertakes its manufacturing operations from facilities located in Umbergaon, Gujarat and Bari Brahma, in Jammu and Kashmir.
As of September 30, 2023, it has a widespread multi-channel distribution network with a strong pan-India presence and a global footprint catering to over 45 countries, covering the Americas, Africa, Asia Pacific, Europe, and Middle East. Its 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.
Now lets talk of Financial part. The company has shown consistent financial performance over the last three Fiscals, with its Gross Product Sales and revenue from operations having grown at a CAGR of 72.69% and 73.45% respectively from Fiscal 2021 to Fiscal 2023, its EBITDA Margin (%) having increased from 7.45% to 15.40% over Fiscal 2021 to Fiscal 2023, and ROCE (%) having expanded from 0.36% to 33.31% over the same period.
Its IPO size Rs. 1200 crore comprises of Fresh issue of Capital and Offer for sale. IPO net of Anchor portion is just of Rs. 662.25 Cr with Retail portion of Rs. 119.50 Cr and HNI portion of Rs. 179.25 Cr. So huge oversubscription is a sure thing.
The shares are offered at PE Multiple of 43.19 and has room for listing gains and also returns in the long-term investment.
In spite of Digital focus, Pencils and stationary are expected to have strong presence in our lives and We strongly suggest APPLYING with full force.
Corporate Video: We have given below Corporate Video of the company. Do study the same. Wish you Happy Investing.
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