Divgi TorqTransfer Systems IPO Details

The Divgi TorqTransfer Systems IPO will begin on March 01 and end on March 03. Divgi TorqTransfer System’s initial public offering (IPO) is expected to raise about 412.12 crores, consisting of a 180 crores new issue and an offer to sell of 232.12 crores at a Face value of ₹ 5 per share.

Divgi TorqTransfer Systems Limited, a company founded in 1964, operates as a supplier of automotive parts. They are one of the very few Indian companies that can design and offer torque couplers, dual-clutch automatic transmission solutions, and system-level transfer cases.

It is one of the top companies in India that supplies transfer case systems to automotive OEMs, is also the country’s biggest provider of transfer case systems to manufacturers of passenger cars. Not only that, but they are the only company in India that produces and exports transfer cases to international OEMs. They are also the only company that makes torque couplers.

Divgi TorqTransfer Systems Limited produces and distributes a variety of goods, including:

  1. All-wheel-drive (“AWD”) and four-wheel-drive (“4WD”) products are examples of torque transfer systems.
  2. DCT and manual transmission synchronizer systems;
  3. Components for the aforementioned product categories of EVs, DCTs, and torque transfer systems and synchronizer systems.
Also, they have grown DCT systems, manual rear-wheel drive transmissions, and EV transmission systems side by side.


Objective of the Issue

It is proposed that the Fresh Issue’s net proceeds be used as follows:

  1.  Funding capital expenditure requirements for the purchase of equipment/machineries of the manufacturing facilities
  2.  General Corporate purposes.
Divgi TorqTransfer Systems IPODetails
Price Band₹560 to ₹590 per share
Face Value₹ 5 per share
Issue Size412.12 Crs
Fresh Issue180 Crs
Offer for Sale 232.12 Crs
Opening Date01 Mar 2023
Closing Date03 Mar 2023
Allotment09 Mar 2023
Initiation of Funds10 Mar 2023
Credit to Demat13 Mar 2023
Listing Date 14 Mar 2023
Pre Issue Share Holding67.8%
1 lot25 Shares (₹ 14,750/-)
Retail Quota10%
QIB Quota75%
NII Quota15%
Retail (Min)1 Lot (25 Shares ~ ₹ 14,750/-)
Retail (Max)13 Lots (325 Shares ~ ₹ 1,91,750/-)
S-HNI (Min)14 Lots (350 Shares ~ ₹ 2,06,500/-)
B-HNI (Min)68 Lots (1700 Shares ~ ₹ 10,03,000/-)
PromotersJitendra Bhaskar Divgi, Hirendra Bhaskar Divgi and Divgi Holdings Private Limited
Draft Red Herring ProspectusDRHP
Red Herring ProspectusRHP
Grey Market PremiumClick Here
Allotment StatusCheck Here

The Divgi TorqTransfer Systems IPO’s bid period is from March 01, 2023, at 10:00 A.M., to March 03, 2023, at 5:00 P.M. UPI Mandate confirmation must be received by 5 PM on the day the issue closes.


EBITDA & PAT (in Crs)

EBITDA– Earnings Before Interest Tax Depreciation & Amortization              PAT – Profit After Tax

Total Assets, Share Capital and Borrowings (in Crs)

Revenue Growth (in Crs)

Peer Comparison

ParticularsDivgi TorqTransfer Systems Limited Sona BLW Precision Forgings Limited Bosch LimitedZF Commercial Vehicle Control Systems India Limited Sundaram Fasteners Limited Endurance Technologies Limited
Face Value510105110
PE35.20 (taking 590 as the listing price)73.5241.44124.8345.1044.61
Debt to Equity Ratio00.040.01-0.290.09


If we analyse the financial parameters of Divgi TorqTransfer Systems, then it can be clearly seen that the firm is on the growth path with both EBITDA and PAT increasing on year to year basis. Total assets of the company are increasing and in its borrowings are continuously decreasing on YOY basis. Now, firm has almost zero debt. This firm’s revenue growth is also good.

Taking the EPS as 16.76 as per RHP, PE ratio is 35.20 which is on the lower side if compared with the peers however, it is on the higher side in comparison to the Industry PE of 20.95. This simply depicts that the IPO price is on the higher side but we cannot say anything without considering other fundamental parameters. 

RoNW of 13.57% & EBITDA margin of 28.10% as per RHP, are comparable to its peer companies. But if you compare its own Pat Margin growth then it is on the growth path and it can be confirmed by checking the revenue from operations which is also steadily increasing on YOY basis. This depicts that the company is on the growth path.

ROE of 13.60 as per RHP, is good in comparison to its peers and with low levels of debts, this parameter indicates that the returns generated were good. Overall, this IPO seems to be good for long term investment as it is almost zero debt firm with one of the few suppliers in the field of DCT solutions, transmission systems for EVs, torque coupler. With a number of prestigious domestic and international OEMs in the automotive industry, including Tata Motors and Mahindra & Mahindra, as well as with international suppliers like BorgWarner, it has solid and long-standing ties.

Currently market is bearish and is in correction phase so grey market premium and subscription status should be checked in order to get the listing gains. 


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