About the Company:
DCX Systems Ltd is among the leading Indian players for the manufacture of electronic sub-systems and cable harnesses in terms of manufacturing capability and revenue in Fiscal 2022 in the defence and aerospace sector.
Company is primarily engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies and are also involved in kitting.
Company commenced operations in 2011 and have been a preferred Indian Offset Partner (“IOP”) for foreign original equipment manufacturers (“OEMs”) for executing aerospace and defence manufacturing projects.
Company is one of the largest Indian Offset Partner (“IOP”) for ELTA Systems Limited and Israel Aerospace Industries Limited, System Missiles and Space Division (together, the “IAI Group”), Israel, for the Indian defence market for manufacture of electronic sub-systems and cable and wire harness assemblies.
As of June 30, 2022, company had 26 customers in Israel, United States, Korea and India, including certain Fortune 500 companies, multinational corporations and start-ups.
Company’s customers include domestic and international OEMs, and private companies and public sector undertakings in India across different sectors, ranging from defence and aerospace to space ventures and railways.
Company’s Customers:
Company has a mix of domestic and international customers and certain of our key customers include
- Elta Systems Limited.
- Israel Aerospace Industries Limited – System Missiles and Space Division.
- Bharat Electronics Limited.
- Astra Rafael Comsys Private Limited.
- Alpha-Elsec Defense and Aerospace Systems Private Limited.
- Alpha Design Technologies Private Limited.
- Astra Microwave Products Limited.
- Kalyani Rafael Advanced Systems Private Limited.
- SFO Technologies Private Limited.
- DCX-Chol Enterprises Inc.
Company’s Business verticals:
System Integration:
Company undertakes system integration in areas of radar systems, sensors, electronic warfare, missiles, and communication systems. Company provides product assembly and system integration services of various complexities to address customers’ requirements.
System integration services are part of a comprehensive array of electronics and electro-mechanical assembly and enclosure assembly. Company also provide product repair support for the parts that we manufacture.
Cable and Wire Harness Assemblies:
Company manufactures a comprehensive array of cables and wire harnesses assemblies such as radio frequency cables, co-axial, mixed signal, power, and data cables for a variety of uses including communication systems, sensors, surveillance systems, missile systems, military armored vehicles, and other electronic warfare systems for the aerospace and defence industries as per our customers’ requirements.
Kitting:
Company supply assembly ready kits of electronic and electro-mechanical parts and undertake all aspects of procurement including sourcing components from suppliers approved by our customer along with a ‘Certificate of Compliance’ for traceability, controlled storage of moisture sensitive devices to ensure that customers receive
complete, assembly-ready kits when required when they are needed for production.
Company’s revenue from various Business Verticals:
Company’s Manufacturing facilities:
Company operates through our manufacturing facility located at the Hi-Tech Defence and Aerospace Park SEZ in Bengaluru, Karnataka. Our facility is spread over an area of 30,000 square feet and is set up for complete in-house environmental and electrical testing and wire processing.
The location of company’s facility is in the same city as certain of our key domestic customers like Bharat Electronics Limited, Alpha Design Technologies Private Ltd, Alpha Elsec Defence and Aerospace Systems Private Ltd and Centum Adeno India Private Ltd which, we believe, ensures shorter delivery time.
Company’s Order book:
Our Company’s order book has increased from Rs.1941.3 crores, as of March 31, 2020 to Rs.2369 crores, as of March 31, 2022.
As of June 30, 2022, company’s order book was Rs.2563.6 crores to be executed in the Fiscal 2023 to Fiscal 2025.
Management Team:
- Dr. H.S. Raghavendra Rao (Designation: Chairman & Managing Director)
- Mr. Sankarakrishnan Ramalingam (Designation: Whole-time Director)
Objectives of the Issue:
Offer for Sale: (Rs.100 cr)
- Each of the Selling Shareholders will be entitled to the proceeds of the Offer for Sale. Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs. 400 cr)
- Repayment/ prepayment, in full or part, of certain borrowings availed by the Company.
- Funding working capital requirements of the Company.
- Investment in our wholly owned Subsidiary, Raneal Advanced Systems Private Limited, to fund its capital expenditure expenses.
- General corporate purposes.
Positives for the Company:
Among the preferred Indian Offset Partners for the defence and aerospace industry with global accreditations.
- Company is a preferred IOP for foreign OEMs for executing defence manufacturing projects.
- Company undertake “build-to-print” system integration and manufacture cable and wire harness assemblies for both domestic and international OEMs.
- Company is also one of the largest IOP for the IAI Group, Israel, for the Indian defence market for manufacture of electronic sub-systems and cable and wire harness assemblies.
Well-positioned to capitalize on industry tailwinds.
- There is a strong focus and various initiatives by the Government of India in the aerospace and defence sectors and in particular for private players including micro, small and medium enterprises.
- The Defence Acquisition Policy 2020 ensures that large number of innovations utilised in defence equipment are now available to private entities.
- With defence public sector undertakings focussing on specialisation and integration and sub-component manufacture being outsourced to the private sector, there are significant opportunities for the private sector.
Proposed Manufacturing Facility.
- In addition to the EMS Facility, to take advantage of the immediate opportunities available for the manufacturing of PCB Assemblies, wholly owned subsidiary, RASPL is in the process of setting up an additional manufacturing facility for EMS at Company’s existing premises.
- The Additional Facility will have facilities for design, development, manufacturing, qualification and life cycle support of electronic and electro – mechanical systems used in Aerospace and Defence, Medical Electronics and Industrial Electronics application.
Financials of the Company:
| (in Crores) | FY 20 | FY 21 | FY 22 | 30th June 2022 |
|---|---|---|---|---|
| Revenue | 465.2 | 683.2 | 1124.3 | 220.2 |
| Net Profit | 9.70 | 29.5 | 65.6 | 5.5 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| DCX Systems Ltd | 2 | 9.19 | 22.52 | 55.79% | 15.19 |
| Data Patterns Ltd | 2 | 19.48 | 61.56 | 16.4% | 110.72 |
| Paras Defence and Space Technologies Ltd |
10 | 7.78 | 84.69 | 7.2% | 97.06 |
| Astra Microwave Products Ltd |
12 | 4.37 | 73.15 | 6.5% | 67.61 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 31st October 2022 |
| Issue Closes on:. | 2nd November 2022 |
| Issue Price | Rs.197 – 207 |
| Face Value | Rs.10 |
| Retail Category Allocation | 10% |
| Minimum Lot | 72 shares |
| Minimum Investment | Rs.14,904 |
| Issue Constitutes | 24.97% |
| Issue Size | Rs.500 cr ($ 60 million) |
| Market Cap | Rs.2000 cr ($ 240 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 1,93,23,671 |
| Equity Shares Offered (OFS) | 48,30,917 |
| Equity Shares Offered (Fresh + OFS) | 2,41,54,588 |
| Equity Shares Prior to the issue | 7,74,00,000 |
| Equity Shares after the issue | 9,67,23,671 |
Also Read : List of Upcoming IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 7th November 2022 |
| Initiation of Refunds | on or Before 9th November 2022 |
| Credit of Equity Shares: | on or Before 10th November 2022 |
| Listing Date: | on or Before 11th November 2022 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 9.19 | 22.52 | 55.79% | 15.19 |
| Company Contact Info: |
|---|
| DCX Systems Ltd Aerospace SEZ Sector, Plot Numbers 29,30 and 107, Hitech Defence and Aerospace Park, Kavadadasanahalli Village, Devanahalli Taluk, Bengaluru Rural-562 110 Karnataka, India Tel.: +91 80 6711 9555/9535 Email: cs@dcxindia.com Website: www.dcxindia.com |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C-101, 1st Floor 247 Park Lal Bahadur Shastri Marg Vikhroli (West) Mumbai 400 083 Maharashtra, India Tel: +91 22 4918 6200 E-mail: dcxsystems.ipo@linkintime.co.in Website: www.linkintime.co.in |
