"DCX Systems IPO Review"
Before the end of 2022, after quite some time, a new IPO has entered the market. What’s interesting is that out of this 500 crore IPO, 400 crore is a fresh issue, with only 100 crore as an FPO. Besides, the majority of rating agencies and individual analysts have recommended subscribing to it. This is thanks to its reasonable valuations, strong order book, visibility on cash flows, and industry tailwinds.
Let’s take a detailed look at this new IPO with company analysis and review.
DCX Systems IPO Details:
IPO Opens On | Oct 31, 2022 |
IPO Closes On | Nov 2, 2022 |
IPO Price | ₹197 – ₹207 |
Face Value | ₹2 |
IPO Size | ₹500.00 Cr |
Listing At | BSE, NSE |
Lot Size | 72 |
Application | Lot | Shares | Amount |
Retail (Min) | 1 | 72 | ₹14,904 |
Retail (Max) | 13 | 936 | ₹193,752 |
S-HNI (Min) | 14 | 1,008 | ₹208,656 |
B-HNI (Min) | 68 | 4,896 | ₹1,013,472 |
Let's know about DCX company :
DCX System Limited is a cable harnesses and electronic sub-systems manufacturing company. The company was founded in 2011 and has emerged as a leading player in its sector. DCX System Limited has been a preferred Indian Offset Partner (“IOP”) for foreign original equipment manufacturers (“OEMs”) for executing aerospace and defence manufacturing projects.
- Cable, Wire Harness Assemblies.
- System integration in electronic warfare, missiles, radar systems and communication systems.
- Kiting – Supply of assembly-ready kitsof electronic and electro-mechanical parts.
The revenue from operations of DCX Systems is as follows:
- FY 2020 – Rs. 4,492.62 million, EBIDTA Margin – 9.7% Net Worth – 172 million
- FY 2021 – Rs. 6,411.63 million, EBIDTA Margin – 4.8% Net Worth – 468 million
- FY 2022 – Rs. 11,022.73 million, EBIDTA Margin – 9.4% Net Worth – 1,176 million
DCX Systems has customers not only in India but also abroad, such as Israel, the United States, Korea, and among them are some Fortune 500 companies and multinational corporations.
The customer base includes domestic and international OEMs, private companies, and public sector undertakings in India across different sectors, ranging from defence and aerospace to space ventures and railways.
What are the competitive strengths of this IPO?
Yeh company ‘Defence space’ mai ek fast growing company hai. Iss ‘Make in India’, ‘Atmanirbhar Bharat’ era mai, iss company ka future bright hai. Well because the growing Indian landscape for defence and aerospace may serve as a key opportunity for DCX Systems.
Besides, the recent initiatives like an increase in FDI in the Indian defence sector from the current 49% to 74% under the automatic route are anticipated to open new growth opportunities for the industry.
The issue price of DCX Systems also seems to be fairly priced based on their valuations. Which is why investors can gain both, long-term as well as listing gains.
Peer Comparison
GMP trends of DCX Systems
Shares of DCX Systems Ltd have debuted in the grey market, and one share is available at a premium of ₹90.
Let's see what analysts are saying –
According to Angel One,
“DCX Systems has better revenue growth CAGR of 57 per cent and PAT CAGR of 159 per cent over the last two years. It has healthy return on equity and a strong order book of Rs 2,564 crore, which provide visibility for the next 2 years. Considering all the positive factors, we believe valuations are at reasonable levels.”
According to Sushil Finance,
“There are listed peers like BDL trading at P/E 32 times (Lowest) and Paras Defence trading at P/E 84 times (highest) and industry average P/E is 62 times. The Indian government has banned defence-based imports that will boost indigenous manufacturing within India. DCX Systems is preferred IOP for foreign OEMs for executing defence manufacturing projects.”
According to BP Equities,
“To enhance its global presence, the company continues to strengthen its international operations in Israel, the United States and Korea and also aims to expand its global-footprint to Europe. The shift from passive to active radar solutions will also provide numerous opportunities for the company.”
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