Dhoot Transmission debuts in India after heavily subscribed IPO
The auto components manufacturer is making its market debut following strong institutional bidding, highlighting investor appetite for India's electric vehicle supply chain.
Dhoot Transmission made its stock market debut on Monday morning, listing on both the BSE and NSE. The auto components manufacturer began trading at 10:00 IST following a special pre-open session.
The listing concludes an initial public offering that ran from August 10 to August 12. The issue was heavily oversubscribed, driven primarily by strong demand from institutional investors.
Qualified institutional buyers subscribed 212.92 times, while non-institutional investors bid 51.93 times the available shares. Retail investors showed a more modest subscription rate of 8.12 times by the close of the bidding period.
The company priced its shares between ₹829 and ₹871, valuing the business at 44.9 times its FY26 post-issue earnings. Unlisted market indicators suggested a strong debut, with the grey market premium reaching ₹264 on the morning of the listing.
That premium pointed to an estimated opening price of ₹1,135 per share, representing a 30.31% gain over the top end of the price band. The grey market premium had trended upward over the previous 14 trading sessions, reflecting sustained market interest.
Mahesh M. Ojha, vice president at Kantilal Chhaganlal Securities, noted the company's dominant position in the domestic auto components sector. He highlighted that Dhoot Transmission holds a 41.03% market share in the two-wheeler and three-wheeler wiring harness segment for FY26.
The company's footprint is even larger in the electric vehicle space, commanding nearly 70% of the electric two-wheeler and three-wheeler wiring harness market. Ojha described the IPO valuation as fair given this exposure and the firm's long-term growth prospects.
Looking ahead, Ojha expects margins to expand over the medium to long term. This growth will be supported by capacity expansions and a richer product mix that includes battery packs and electronic components.
However, near-term profitability could face pressure from acquisition-related costs and plant start-up expenses. The company may also experience a lag in passing higher commodity costs on to its customers as new operations stabilize.
Ojha projected listing gains of 25% to 30% for early backers. He advised short-term traders to book partial profits after a strong debut, while long-term investors should hold the stock and new buyers wait for price stabilization.
