Nilekani family trust likely to make 3

Nilekani family trust likely to make 3.7x returns in Divgi IPO

Nandan Nilekani family-backed auto component company, Divgi TorqTransfer Systems (DTTS), will come up with the first initial public offer of this year. The Pune-based company’s Rs 412 crore IPO will open on March 1 in the price band of Rs 560-590 per equity share of face value of Rs 5 each. The offer closes on March 3. Bids can be made for a minimum of 25 equity shares and in multiples of 25 equity shares thereafter.

Nilekani has invested in the company through their NRJN Family Trust, which owns 8.70% shareholding of the company. The Nilekani family trust would be selling up to 1.4 million shares of Divgi TorqTransfer in this offer for sale. The average cost of acquisition of these shares for the trust was Rs 125.28, which will yield 3.5x to 3.7x returns. They own a total of 2.4 million shares.

Also read: Higher for Longer narrative keeps the dollar bid; strength in greenback could push USDINR towards 83

The IPO comprises a fresh issue of equity shares aggregating up to Rs 180 crore of fresh issue and an offer for sale of up to 3.9 million shares of Rs 232.12 crore. The company proposes to utilise the proceeds of the fresh issue towards funding capital expenditure for its manufacturing facilities and general corporate purposes.

Also read: Warren Buffett calls repurchase critics economic illiterate; 4 reasons why he finds value in share buybacks

Jitendra Divgi, managing director, Divgi TorqTransfer Systems, said companies like theirs was a contributor to the India story and the company remained fully confident to sail through the market with its IPO despite prevailing market conditions.

Divgi TorqTransfer Systems is a supplier of torque transfer systems, transmission systems, synchronizers and components to automotive OEMs and is the largest supplier of transfer case systems to passenger vehicle manufacturers in India. It is also the only player manufacturing and exporting transfer cases to global OEMs and the only domestic manufacturer of torque couplers and dual-clutch transmission solutions.