About the Company

Divgi TorqTransfer Systems Limited is engaged in the business of Manufacturing and Supplying system-level transfer cases, torque couplers, and DCT (Dual Clutch Transmission) solutions. The company is also a leading supplier of transfer case systems to automotive OEMs in India and passenger vehicle manufacturers in India. The Company serves both as a systems-level solution provider as well as a component kit supplier to global OEMs and Tier I transmission systems suppliers

The company Manufactures and supplies a variety of products under the Broad categories of

1. Torque transfer systems - In automobiles, torque transfer systems are commonly used to transfer power from the engine to the wheels.

2. Synchronizer systems for manual transmissions and DCT (Dual Clutch Transmission)- These systems are made to synchronize the engine's rotational speed with the rotational speed of the gears in a gearbox, enabling effortless gear shifting.

3. Components for the above-mentioned categories

Industry Overview

CRISIL estimates the size of the transfer case market (catering to OEM demand) at 89 thousand units by volume and Rs 3.6 billion in terms of value in fiscal 2022.

The market for transfer cases is expected to increase by 24-27% CAGR from fiscal 2022 and 2027 that is from 89 thousand units to 270-275 thousand units in volume terms and by 25-28% CAGR in value terms i.e. from Rs 3.6 billion to Rs 11-13 billion

CRISIL estimates the size of the synchronizer industry (catering to OEM demand) at Rs 22.6 billion in fiscal 2022. The market for synchronizers is expected to increase by 8-10% CAGR from fiscal 2022 and 2027 in volume terms and by 10-13% CAGR in value terms. The market for synchronizers is expected to touch Rs 39-41 billion by fiscal 2027.

Objects of the offer

1. Funding capital expenditure requirements for the purchase of equipment/machinery at our manufacturing facilities

2. General Corporate purpose

Key Financials

Valuation

As per the RHP, the company has 5 listed peers viz., Sona BLW Precision Forgings Limited, Bosch Limited, ZF Commercial Vehicle Control Systems India Limited, Sundram Fasteners Limited, Endurance Technologies Limited

1. The company’s PE on the upper price of Rs.590 comes to 36 times and the industry average PE is 65.78 times, indicating an undervaluation.

2. The company’s PB on the upper price is Rs.590 is 4.56 times and the industry PB range is from 4.41 times to 13 times.

IPO Details

1. The IPO is open for subscription from 1^st March 2023 to 3^rd March 2023
2. The IPO has a lot size of 25 shares and retail individual investors can apply for a maximum of 13 lots worth Rs. 1,91,750/-
3. The issue size is 412.12 crores out of which 180 crores is a fresh issue and the balance is OFS.
4. As of releasing the blog the grey market premium is around 11.53%