Dixon Technologies makes stellar debut; ends at 64% premium on IPO price

The stock listed at Rs 2,725, a 54% premium against its IPO price of Rs 1,766 on BSE and NSE

Dixon Technologies (India) has made a strong debut on the bourses by listing at Rs 2,725, a 54% premium on its initial public offering (IPO) price of Rs 1,766 per share on the National Stock Exchange (NSE) and BSE.

The stock hit a high of Rs 3,024 on NSE after few seconds of its listing. It ended at Rs 2,903, up 64% from its IPIO price. A combined 1.67 million shares changed hands on the counter on BSE and NSE so far.

Dixon Technologies, a consumer electronics and lighting product manufacturer for global and Indian brands, raised Rs 600 crore though IPO, which got tremendous response from the all category of investors. The issue was over-subscribed 118 times, received bids for 280 million shares against the total issue size of 2.38 million shares. The portion set aside for qualified institutional buyers (QIBs) was subscribed 135 times, non institutional investors 346 times and retail investors 11 times.

The IPO proceeds from the fresh issue will be utilized for repayment/pre-payment, in full or in part, of certain borrowings availed by the Company, setting up a unit for manufacturing of LED TVs at the Tirupati facility, enhancement of backward integration capabilities in the lighting products vertical at Dehradun I facility, upgradation of the information technology infrastructure and general corporate purposes.

The Company plans to increase its ODM sales as it controls entire manufacturing cycle of a product; thereby leading to higher margins as compared to OEM segment.

“Dixon Technologies would continue to report higher revenue and improvement in margins owing to its presence in high growth segments, experienced management and growing share of ODM segment. Despite the company operating on thin margins, it has registered return on capital of a whopping 33.3% in FY2017. Further, it has been generating positive cash flow from operations over the last 5 years and negligible debt post IPO,” Angel Broking said in a note.