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Salient features of the IPO:

•  DOMS Industries Ltd. (Doms), a Gujarat based manufacturer of stationery & art products is coming up with an IPO to raise around Rs. 1,200cr, which opens on 13th Dec. and closes on 15th Dec. 2023. The price band is Rs. 750 - 790 per share.

• The IPO is a combination of fresh and OFS portion. From the OFS issue, the company will not receive any funds. From the fresh issue net proceeds, Doms will be utilizing Rs. 3,800cr for part-financing its ongoing capacity expansion plan. Rest of the net proceeds will be used for general corporate purposes.

• Couple of promoter & promoter group (P&PG) entities are participating in the OFS and offloading around 1.135cr shares (considering the higher price band). Post-IPO, P&PG will have 74.97% stake in the company, compared to 100% earlier. Consequently, public shareholding will increase from nil to 25.03%.

Key competitive strengths:

• Leadership position in the Indian ‘stationery and art material’ market with the widest range of products, driving rapid business growth

• Strong brand recall driven by high quality, innovative and differentiated products

• Robust manufacturing infrastructure, with a focus on backward integration to drive efficiencies

• Robust multi-channel distribution network with strong pan India presence

• Strategic partnership with F.I.L.A.- Fabbrica Italiana Lapis ed Affini S.p.A., enabling access to global markets and product know-how

• Experienced promoters and management team

Risk and concerns:

• General slowdown in the global economic activities

• Unfavorable government policies & regulations

• Changing consumer demand and preferences

• Delay in the commissioning of new facilities

• Unfavorable product-mix and forex rates

• Volatilities in the raw material prices difficulty in maintaining the profitability

• Competition

Below are the key highlights of the company:

• The stationery & art materials market deals in a wide range of products & categories, comprising of paper products, writing instruments, computer stationery, school stationery, office stationery, stationery adhesives, art & craft products etc. Over 2016-2022, the global stationery & art materials market grew by 2% CAGR to USD 192bn in 2022 and further it is expected to expand by 2.8% CAGR to a market size of USD 220bn by 2027. The US and China region represented around 60%, while emerging markets like India has 2.4% share in the global stationery & art materials market. By 2027, India is anticipated to capture around 4% of the global stationery & art materials market. Over FY17-23, the Indian stationery & art materials market expanded by 3% CAGR to Rs. 38,500. However, over FY23-28E it is forecasted to expand by 13% CAGR to reach a size of Rs. 71,600cr. (Source: RHP)

• The domestic stationery & art materials market can be segmented into paper stationery (contributing 42% to the total market by value) and non-paper stationery products (with around 58% share). Paper stationery products can be further sub-divided into notebooks and papers, with notebooks accounting for the larger share by value. Non-paper stationery products can be sub-divided into writing instruments, office supplies, art & craft products etc., with writing instruments accounting for the larger share by value.

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