DCX Systems subscribed 45% on the first day of bidding

Mumbai: Defence equipment manufacturer DCX Systems launched its Rs 500-crore initial public offering today. The company has garnered bids for more than 64.84 lakh shares against an IPO size of 1.45 crore shares, which translates to a subscription of 45 per cent on the first day of bidding.
The Bengaluru-headquartered firm is offering fresh shares worth Rs 400 crore and is selling Rs 100 crore shares through the offer-for-sale at a price band of Rs197-207 apiece. Share of the company has a face value of Rs2 apiece and will be listed on BSE and NSE. The lead managers of the firm are Edelweiss Financial Services, Axis Capital and Saffron Capital Advisors.
If the shares are to be sold at the higher end of the price band, it will fetch Rs 400 crore for the company. The issue will represent 25 per cent of the company's equity capital following the IPO. When the company is valued at the upper end of the price range, the company is worth Rs 2,002 crore. The defence equipment maker also said it had raised Rs 225 crore from anchor investors. It allotted 1.08 crore shares to anchor investors for Rs 207 apiece, it said.
DCX is one of the leading manufacturers of electronic sub-systems and cable harnesses in India. It started operations in 2011 and has been a preferred Indian Offset Partner (IOP) for foreign original equipment manufacturers (OEMs) for executing aerospace and defence manufacturing projects.
The shares of defence stocks had been rallying recently as the government had taken the decision to increase sourcing of defence raw materials locally. There had been a lot of development and agreement between foreign companies and local companies in the field of drones, artificial intelligence and machine learning.
Stocks like Mazagon Dock Shipbuilders, Zen Technologies, BEL and Paras Defence had been strengthening for 2-3 months.
In her Budget speech for FY23, Finance Minister Nirmala Sitharaman said 68 per cent of capital for the defence sector will be earmarked for the local industry. This is against 58 per cent at present. The government is focusing on public-private partnership for the design and development of military platforms and equipment in collaboration with government agencies such as DRDO and others. (ANI)