Divgi TorqTransfer System, a leading supplier of transfer case systems to vehicle manufacturers, has proposed to open its initial public offering (IPO) of equity shares of face value INR 5 each (equity shares) on Wednesday, March 1, 2023.
The price band of the offer has been fixed at INR 560-590 per equity share. Bids can be made for a minimum of 25 equity shares and in multiples of 25 equity shares thereafter, said the company.
In a press meet earlier Monday, the company said the IPO comprises of fresh issue of equity shares aggregating up to INR 180 crore and offer for sale of up to 39,34,243 equity shares. The Anchor Investor Bidding Date will be February 28, 2023, while the offer will close on March 3, 2023.
The net proceeds of the IPO have been proposed to be utilised for funding capital expenditure requirements for the purchase of equipment/ machinery of its manufacturing facilities (capital expenditure) and for general corporate purposes.
Notably, the offer for sale comprises up to 22,50,000 equity shares of Oman India Joint Investment Fund II, up to 14,41,441 equity shares of NRJN Family Trust (represented by its corporate trustee, Entrust Family Office Legal, and Trusteeship Services), and up to 242,802 equity shares by certain non-promoter shareholders of the company.
Divgi TorqTransfer Systems is one of the very few suppliers in India, who have the capability to develop and provide system-level transfer cases, torque couplers and Dual-Clutch Transmission (DCT) solutions. It claims to be largest supplier of transfer case systems to passenger vehicle manufacturers in India.
In addition to product supply, the company has entered into a product development agreement (PDA) and a technology transfer agreement (TTA) with a German automotive company. “Pursuant to the PDA and TTA”, the company is co-developing critical components and systems for DCT applications with “exclusive rights for India and non-exclusive rights for markets outside India”, the release said.
The licence agreement Divgi TorqTransfer Systems had signed with BorgWarner on October 4, 2004 was subsequently renewed on March 1, 2017. This agreement is valid for a period of seven years from the date of renewal of the agreement.
It also has an exclusive distribution agreement with a Japanese automotive supply chain company, in relation to sourcing products and components made by the company, the company said.