DOMS Industries Limited, a key player in the Indian stationery and art products market, has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI). This move sets the stage for DOMS Industries IPO worth up to INR 1,200 crore. The upcoming IPO comprises a fresh issue amounting to INR 350 crore and an offer for sale (OFS) totaling INR 850 crore.
Breaking Down the DOMS Industries IPO
The OFS portion in DOMS IPO includes equity shares worth INR 800 crore from the corporate promoter, F.I.L.A. – Fabbrica Italiana Lapis ed Affini S.p.A. Additionally, Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani contribute with equity shares each, totaling INR 25 crore individually.
Funding for Growth
The funds raised from the fresh issue have earmarked purposes, most notably for the establishment of a new manufacturing facility. This facility is crucial to the company’s expansion of production capabilities. The objective is to diversify its product range, encompassing a wide array of writing instruments, watercolor pens, markers, and highlighters. Moreover, a portion of the funds will be dedicated to general corporate functions.
Diverse Product Portfolio and International Presence
DOMS Industries Limited is renowned for its extensive selection of well-designed, high-quality stationery and art products. Under the flagship brand ‘DOMS,’ along with sub-brands like C3, Amariz, and Fixy Fix, the company caters not only to the domestic market but also to over 40 countries worldwide. These countries span across the US, Africa, Asia Pacific, Europe, and the Middle East.
Wide Product Categories
The company classifies its diverse portfolio, consisting of over 3,770 SKUs, into seven distinct categories. These categories encompass scholastic stationery, scholastic art materials, paper stationery, kits and combos, office supplies, hobbies and crafts, and fine art products. In the fiscal year 2023, DOMS Industries Limited commands a significant market share by value—29% for pencils and 30% for mathematical instrument boxes.
DOMS IPO – Core Contribution and Growth Trajectory
Notably, among the evolving product offerings, pencils remain a cornerstone, contributing a substantial 31.66% to the gross product sales, totaling INR 389.99 crore in the fiscal year 2023. Over the period from fiscal year 2020 to fiscal year 2022, the company’s multi-category, multi-price-point approach has propelled it to be India’s fastest-growing stationery and art material products provider in terms of revenue.
Manufacturing and Distribution
With 11 manufacturing facilities strategically located in Umbergaon, Gujarat, and Bari Brahma, Jammu and Kashmir, DOMS Industries possesses a robust production setup. Coupled with an expansive multi-channel distribution network, the company effectively covers the entire nation. This distribution network extends to more than 100 super-stockists, 3,750 distributors, and a dedicated sales team. They collectively serve over 115,000 retail touchpoints across 3,500 cities and towns, in addition to modern trade and e-commerce platforms.
DOMS IPO – Keeping an Eye on Market Potential
Education’s pivotal role in economic development has spurred the Indian government to institute various programs to foster the sector. Projections indicate that by 2030, the Indian education market could reach USD 313 billion. As the education landscape expands, so does the demand for stationery products. This trend, coupled with the growth trajectory of the Indian stationery and art materials market, is anticipated to elevate its market value from INR 38,500 crore in FY 2023 to an estimated INR 71,600 crore by FY 2028. These stats are likely to work in favor of DOMS Industries IPO.
Global Demand and Export Potential
The demand for stationery products is not confined to India. Increasing literacy rates and education levels worldwide contribute to this demand. India is well-positioned to capitalize on this by offering a diverse range of stationery products at competitive prices. Abundant raw materials and cost-effective manufacturing, thanks to lower labor costs, give India an edge in the global market. Government initiatives like Make in India and the PLI scheme further bolster India’s export capabilities. The nation’s prominence as an exporter augments its economic growth.
DOMS Industries leverages its focus on crafting quality products at accessible price points, particularly for children and young adults. This strategic approach differentiates the company from competitors, allowing it to tap into growth opportunities both in India and globally.
Guiding the IPO
Leading the DOMS Industries IPO are JM Financial Limited, BNP Paribas, ICICI Securities Limited, and IIFL Securities Limited as the Book Running Lead Managers. Additionally, Marathon Capital Advisory Private Limited and ITI Capital Limited serve as the company’s corporate advisors.
Given the direct connect of the brand with its end customers and the retail nature of the products, DOMS IPO will be a closely-watched affair.
