Dhoot Transmission files confidential draft papers; aims to raise USD 250 mn via IPO

Backed by private equity major Bain Capital, the proposed IPO will comprise a fresh issue of equity shares along with an offer for sale (OFS) by existing investors, while the promoters will not sell any stake through the OFS, sources said.

In a public announcement on Tuesday, Dhoot Transmission said it has “pre-filed draft red herring prospectus with Sebi and the stock exchanges…in relation to the proposed initial public offering of its equity shares on the main-board of the stock exchanges”.

According to market sources, the initial public offering (IPO) size has been pegged at $250 million.

Dhoot Transmission has opted for the confidential pre-filing route, which allows the company to engage with the Securities and Exchange Board of India (Sebi) for initial feedback on its draft document without it being publicly disclosed.

This route has been increasingly favoured by companies seeking more flexibility in their IPO preparations and responding to market conditions before a public filing.

The filing comes amid sustained activity in the auto components segment of the capital markets. Over the past three years, several players including ASK Automotive, and Motherson Sumi Wiring India have debuted on the exchanges, while a number of other auto ancillary and electric vehicle-linked component manufacturers are at various stages of regulatory approval.

Bain Capital holds a 49% stake in the company. The investment was accompanied by the consolidation of promoter-held entities, including Dhoot Holding Pvt Ltd, into Dhoot Transmission.

The company has clients including Bajaj Auto, TVS Motor Company, Honda Motorcycle & Scooter India and Royal Enfield.

On the financial front, the company’s consolidated revenue scaled up to ₹2,653 crore in FY24 from ₹1,550 crore in FY22. The company derives 15-20% of its revenue from overseas operations.

Kotak Mahindra Capital, Jefferies India, Nomura India, SBI Capital Markets and 360 ONE WAM are acting as merchant bankers to the issue.