Dhoot Transmission IPO fully subscribed as investors target EV growth
Strong bidding for the wiring harness manufacturer’s ₹3,067 crore public offering reflects market confidence in India’s automotive electrification transition.
Dhoot Transmission’s ₹3,067 crore initial public offering has been fully subscribed ahead of its Wednesday close, driven by aggressive bidding from high-net-worth investors. The book-built issue, which prices shares at a maximum of ₹871, will list on domestic exchanges on 17 August.
By the end of the second day, overall demand reached 3.94 times the available stock. Non-institutional investors led the charge with a 10.62 times subscription, while retail investors bid 2.97 times. Qualified institutional buyers, however, have only covered half of their reserved portion so far.
Unlisted market sentiment remains highly optimistic. A grey market premium of ₹255 indicates the electrical components manufacturer could debut with a 29 per cent gain. This appetite highlights investor enthusiasm for domestic suppliers positioned to benefit from the shift toward electric mobility.
Dhoot designs and manufactures wiring harnesses and electrical distribution systems, holding a dominant position in the local automotive sector. The company commands more than 70 per cent market share in the three-wheeler segment and maintains a leading role in two-wheeler components.
The book build combines a fresh issue of ₹1,400 crore with an offer for sale of ₹1,667 crore. Proceeds from the new shares will be deployed to reduce debt and establish manufacturing plants in Haryana and Tamil Nadu.
Brokerages recommend subscribing for the long term, viewing the pricing as reasonable for a high-growth franchise. Based on annualised earnings for the fiscal year ending in 2026, the valuation sits at roughly 45 times earnings, implying a post-issue market capitalisation of about ₹17,816 crore.
Analysts point to deep integration with major automakers as a key defensive moat. "The company’s long-standing relationships with its top 5 customers, averaging around 13 years, reflect strong customer integration, engineering capabilities, and high switching costs, supporting revenue visibility," Anand Rathi noted.
The brokerage added that facility expansions will allow the company to capture emerging opportunities in battery manufacturing and electric vehicles. ICICI Direct echoed this sentiment, arguing the premium multiple is warranted by the company's strategic positioning and direct exposure to domestic electrification trends.
ICICI Direct noted that at the upper price band, the issue is valued at nearly 45 times earnings and roughly four times sales for the 2026 fiscal year. The firm concluded that the valuation is justified by increasing electric vehicle exposure, a diversified portfolio, and enduring relationships with original equipment manufacturers.
The subscription window closes today, with share allotments scheduled for Thursday. Successful applicants will receive their securities in their accounts on Friday, while unsuccessful bidders will see their funds returned on the same day.
