IPO Update: DCX System Filed IPO Draft Papers with SEBI Planning to Raise Rs.600 Crore

DCX Systems has filed draught documents with the Securities Exchange Board of India in order to raise Rs.600 crore through an IPO.

The initial public offering (IPO) will include a fresh issue of Rs.500 crore and an offer for sale (OFS) of up to Rs.100 crore from existing shareholders and promoters.

NCBG Holdings Inc and VNG Technology Pvt Ltd would sell 50 million shares apiece. Both of these promoters currently own 44.32 percent of the company.

The company intends to use Rs.120 crore to pay off its debt. The company’s total borrowings were Rs.451.51 crore as of February 28, 2022.

In FY23, the business also intends to use Rs.200 crore to meet its working capital requirements. The company intends to invest Rs.44.90 crore in its subsidiary Raneal Advanced Systems Pvt Ltd to cover capital expenditures for the establishment of an electronic manufacturing services (EMS) manufacturing plant (RASPL). The issue’s lead managers are Edelweiss Financial Services Ltd, Axis Capital Ltd, and Saffron Capital Advisors Pvt Ltd.

In terms of production capability and revenue in Fiscal 2021, the company is the main Indian player in the fabrication of electronic subsystems and cable harnesses. It specialises in system integration and producing a wide range of cables and wire harness assemblies, as well as other services.

The company operates out of a manufacturing plant in Bengaluru, Karnataka’s Hi-Tech Defence and Aerospace Park SEZ. Its 30,000-square-foot facility is equipped for extensive in-house environmental and electrical testing as well as wire processing. It had 26 customers in Israel, the United States, Korea, and India as of December 2021, including Fortune 500 firms, international organisations, and start-ups.

Elta Systems Limited, Israel Aerospace Industries Limited – System Missiles and Space Division, Bharat Electronics Limited, Astra Rafael Comsys Private Limited, Alpha-Elsec Defense and Aerospace Systems Private Limited, Alpha Design Technologies Private Limited, Astra Microwave Products Limited, Kalyani Rafael Advanced Systems Private Limited, SFO Technologies Private Limited, and DCX-Chol Enterprises Inc. are some of the company’s major customers.

Its order book stands at Rs.2499.30 crore as of February 28. “Our competitive advantages, we believe, include operational efficiency that results in prompt delivery to clients, quality control, and product security. This has allowed our company to establish long-term partnerships with OEM customers, resulting in increased operations and a large order book “, according to the firm’s DRHP.

Its revenue for the nine months ending December 2021 was Rs.728.23 crore, up from Rs.548.49 crore the previous year. The net profit for the period was Rs.33.20 crore, up from Rs.28.29 crore the previous year.