Davin Sons Retail IPO: Issue dates, price, and lot size

Davin Sons Retail Limited, a prominent readymade garment manufacturer and designer, is preparing to enter the public markets with an IPO worth ₹8.78 crores. The offering comprises a fresh issue of 15.96 lakh shares and will be open for subscription from January 2 to January 6, 2025, culminating in its listing on the BSE SME platform on January 9, 2025. The company's market debut represents an interesting addition to India's growing SME segment.

The IPO is structured with equity shares of ₹10 face value being offered at a fixed price of ₹55 per share, with a lot size of 2000 shares. Retail investors can participate with a minimum investment of ₹110,000 for one lot, while HNIs need to subscribe to at least two lots with ₹220,000. With the allotment process scheduled for January 7, 2025, and a swift path to listing, this offering could present an opportunity for investors looking to participate in India's expanding apparel sector. If you're interested in the garment manufacturing space, this IPO might be worth a closer look.

Davin Sons Retail IPO details

Davin Sons Retail Limited IPO is a fundraise worth ₹8.78 crores comprising purely of a fresh issue with 80,000 shares reserved for the market maker Aftertrade Broking Private Limited. Qualified Institutional Buyers are being offered not more than 50% of the net issue, retail investors are being offered not less than 35% of the net issue and Non-Institutional Investors (NIIs) / High Net-worth Individuals (HNIs) are being offered not less than 15% of the net issue. The IPO will be available for subscription from January 2, 2025, to January 6, 2025, providing an opportunity for investors looking to gain a stake in the apparel industry.

Davin Sons Retail IPO timeline

The Davin Sons Retail Limited IPO opens for subscription on January 2, 2025, and closes on January 6, 2025, with allotment scheduled for January 7, 2025.

Davin Sons Retail IPO review

Davin Sons Retail Limited, established in March 2022, specializes in manufacturing and designing premium readymade garments, with a focus on denim products including jeans, jackets, and shirts for various brands. The company operates through two distinct business verticals: manufacturing readymade garments on a job work basis and distributing FMCG products.

With a geographic presence spanning eight states including Haryana, Delhi, Punjab, Arunachal Pradesh, Rajasthan, Gujarat, Bihar, and Chhattisgarh, the company serves a widely dispersed customer base. As of December 2024, the organization maintains a lean workforce of 20 employees across various departments.

Davin Sons Retail Limited plans to channel the net proceeds from its IPO into three key areas: acquiring a warehouse to expand its storage capabilities, partially funding its working capital requirements, and addressing general corporate needs. The company also aims to benefit from the visibility and credibility that comes with listing on the BSE SME platform.

Davin Sons Retail IPO financials

The Davin Sons Retail Limited IPO has caught the eyes of investors as the company reportedly saw an annual rise of 242% in its revenue and 190% yearly increase in the Profit After Tax (PAT), during the financial year ended March 31, 2024. 

As of March 31, 2024, the key performance indicators reflect the company's financial health with a Return on Equity of 49.41%, Return on Capital Employed (ROCE) at 54.52% and Return on Net-Worth (RoNW) stands at 29.58%. The PAT Margin was 12.25%. The company’s market capitalisation is ₹28.95 crore.

Amount in ₹ lakhs

The pre-IPO EPS is at ₹4.47 while the post-IPO EPS will be ₹2.80. Similarly, the pre-IPO Price to Earnings ratio is 12.29 and will become 19.67 post-IPO.

Davin Sons Retail IPO strengths

Davin Sons Retail Limited benefits from experienced promoters and management with strong industry expertise, demonstrated by their successful track record and healthy financial metrics over the past three years. Their diversified business model, encompassing both garment manufacturing and FMCG distribution, provides stability against industry-specific slowdowns. The company has built strong relationships with suppliers and customers across eight states, while maintaining a virtually debt-free status.

The company's focus on quality and innovation, combined with their diverse product portfolio, enables them to serve as a one-stop solution for existing customers while attracting new ones. Their strategic presence across multiple states ensures strong market penetration and customer accessibility, while their long-standing supplier relationships have helped establish them as a preferred distributor for many companies, contributing to their sustained growth and market position.

Davin Sons Retail IPO weaknesses

A significant concern for Davin Sons Retail is their heavy reliance on third-party job work for garment manufacturing, which could impact their operational control and profit margins. Their revenue concentration is another challenge, with the top ten customers accounting for approximately 64.17% of their total revenue in FY 2022-23, making them vulnerable to potential client losses. Additionally, their regional concentration in specific geographical areas exposes them to regional economic fluctuations.

The company faces several operational challenges, including intense competition in both the garment manufacturing and FMCG distribution sectors. Their small team size of just 20 employees could limit their ability to scale operations effectively. Furthermore, there are pending litigation proceedings involving the company, its promoters, and directors, which could potentially impact their reputation and financial performance. The significant increase in borrowings from ₹24 lakhs to ₹194.45 lakhs also indicates growing working capital needs that require careful management.

Should you invest in the Davin Sons Retail IPO?

Investing early in Davin Sons Retail Limited could offer an opportunity to be part of the company's growth in the apparel manufacturing and designing sector. However, investors should thoroughly evaluate several key factors, including the company's operational history, financial stability, market trends, and growth strategy. It's also important to align these considerations with personal investment goals and risk tolerance. Before making any decisions, reviewing the offer document and seeking professional advice is highly recommended to ensure a well-informed approach to this IPO.

FAQs

What is the Davin Sons Retail IPO?

The Davin Sons Retail Limited IPO is an BSE SME offering consisting of 15.96 equity shares with a face value of ₹10, aiming to raise to ₹8.78 crore. The fixed price has been set at ₹55 per share, with a minimum order quantity of 2,000 shares. This IPO will be open for subscription from January 2, 2025, to January 6, 2024. Navigant Corporate Advisors Limited is the book-running lead manager, Kfin Technologies Limited is the registrar while Aftertrade Broking Private Limited is the market maker.

When will the Davin Sons Retail IPO open?

The Davin Sons Retail Limited IPO will open for subscription on January 2, 2025, and will close on January 6, 2025.

When is the Davin Sons Retail IPO listing date?

The tentative listing date for the Davin Sons Retail Limited IPO is Thursday, January 9, 2025.