Dixon Technologies IPO - Is it worth subscribing? - Indian IPO Blog

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Wednesday, September 6, 2017

Dixon Technologies IPO - Is it worth subscribing?

The rather steeply valued IPO of Dixon Technologies is open for subscription between Sep 6, 2017 and Sep 8, 2017

The IPO received welcoming carpet reception from QIBs on Day 1 with the category getting subscribed 1.78 times. If the category gets accelerated response on Day 2 as well, Retail and HNI investors are sure to follow the suit aggressively

Valuationwise though is the IPO worth? Here's a perspective...

With a price Band of Rs.1760 to Rs.1766, the PE ratio on the upper band is 41.42 times and there are no listed peers to compare as per RHP. However, if we look for cursory forced peers, Havells sits at PE of 56.83 and V Guard trades at 61.23. Comparatively, Dixon looks relatively humble

The company has shown a good growth in terms of consolidated Revenue 33.8% in the past 5 years and a respectable  growth in terms of Profit after tax.

The proceeds are intended to be used for the expansion which is also calming to ears.

All said and done and also taking into account quasi Euphoria in IPO markets, it may be worthwhile to go for Dixon for Long Term if not as a listing gain earner

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