Dhoot Transmission IPO: Bain Capital-Backed Auto Component Maker Files Updated Draft Papers For Mega Public Issue; Should You Apply?

Automotive component manufacturer Dhoot Transmission filed its Updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offering on May 24.

The automotive manufacturer plans to raise funds through a fresh issue of shares and an offer-for-sale. Here’s a look at some key details of the mainboard public issue:

Dhoot Transmission IPO: Offer Size

Dhoot Transmission’s issue consists of a fresh issue of shares aggregating up to Rs 1,400 crore and an offer-for-sale of up to 16.3 million equity shares. As a part of the OFS, BC Asia Investments XV Limited (an affiliate of Bain Capital) will offload up to 13.19 equity shares, while Mangalam Capital Private will pare up to 3.11 million equity shares.

Axis Capital, Jefferies India, Kotak Mahindra Capital, Nomura Financial Advisory, SBI Capital Markets, and 360 One WAM will act as the book-running lead managers for the automotive company’s public issue. The registrar for the issue is KFin Technologies.

Dhoot Transmission IPO: Key Financials

In the financial year ended March 31, 2025, Dhoot Transmission’s consolidated revenue from operations stood at Rs 3,444.86 crore, increasing 23 per cent compared to Rs 2797.72 crore in the financial year ended March 31, 2023. The company’s profit after tax more than doubled over the same period, climbed 18 per cent to Rs 353.89 crore in fiscal 2025 from Rs 298.748 crore in the previous fiscal. The company's operational EBITDA stood at Rs 590.96 crore in the financial year ended March 31, 2025, up from Rs 512.39 crore in fiscal 2023.

Dhoot Transmission: Business Model

Dhoot Transmission is an automotive component manufacturer which makes products for both the domestic and overseas markets. The company is engaged in designing, engineering, and manufacturing critical wiring harnesses, automotive cables, electronic sensors, controllers, switches, terminals, connectors, and electric vehicle battery packs.

The products made by the company are used in the manufacturing of two-wheelers, three-wheelers, commercial vehicles, off-road equipment, and non-automotive segments like consumer durables and medical devices.

The company’s primary source of revenue is through direct sales to original equipment manufacturers (OEMs) such as Bajaj Auto, TVS Motor Company, Honda Motorcycle and Scooter India, and Royal Enfield.

Dhoot Transmission: Competitors

According to Dhoot Transmission’s UDRHP, the company doesn’t have a direct peer with an identical product mix across all categories. However, its listed peers include Minda Corporation, Uno Minda, Motherson Sumi Wiring India and Sona BLW Precision Forgings. The listed firms are among the company’s competitors in the broader automotive component industry.

Dhoot Transmission IPO: Should You Apply?

Here’s a look at the strengths and risks mentioned by the auto component manufacturer in the UDRHP, which investors must know:

Dhoot Transmission: Key Risks

Here are some of the key risks mentioned by Dhoot Transmission in its draft papers:

• Dhoot Transmission mentioned in its UDRHP that it derives a major portion of its revenue from key automotive OEM clients, thus any reduction in volume could adversely affect its business.

• The company added that its business is sensitive to price volatility and supply constraints of key raw materials like copper and specialised electronics components; a significant price rise in these can squeeze operating margins.

• The company also mentioned that its performance is linked to the cyclical nature of the automotive industry; a drop in consumer demand for vehicles can reduce production volumes.

Dhoot Transmission: Key Strengths

Here’s a look at some of the key strengths of Dhoot Transmission according to the company’s regulatory filing:

• The company claims it is one of the leading component makers in the domestic two-wheeler and three-wheeler wiring harness market, and commanded a 44.64 per cent market share by value in FY25.

• The company mentioned in the draft papers that it has established a presence in the electric vehicle segment, holding an estimated market share of more than 70 per cent in the electric two-wheeler and three-wheeler wiring harness landscape.

• The company operates a globally integrated manufacturing footprint, allowing it to rapidly scale powertrain-neutral electronic platforms.

Dhoot Transmission IPO: Objective

Dhoot Transmission plans to use Rs 493.90 crore from the fresh issue proceeds for repayment of outstanding borrowings. It will also invest Rs 272.58 crore into its subsidiaries for debt reduction and deploy Rs 150 crore to set up new manufacturing facilities in Jhajjar, Haryana, and Shoolagiri, Tamil Nadu. The rest of the proceeds from the fresh issue will be allocated toward general corporate purposes and acquisitions.