Dhoot Transmission IPO Day 3: GMP signals strong 29% listing gain. What are analysts saying?

The Rs 3,066.89-crore Dhoot Transmission IPO entered its third and final day of bidding on Wednesday, drawing strong investor interest as the issue was subscribed 5.04 times, according to IPO data on the NSE.

The issue is also commanding a 29.30% premium in the grey market over its upper price band, indicating the possibility of a strong listing gain.

Dhoot Transmission IPO details

Dhoot Transmission has fixed the IPO price band at Rs 829-871 per share. The issue comprises a fresh issue of 1.61 crore equity shares worth Rs 1,400 crore and an Offer for Sale (OFS) of 1.91 crore shares aggregating Rs 1,666.89 crore.

Under the OFS, BC Asia Investments XV Ltd. will sell shares worth nearly Rs 1,395 crore, while Mangalam Capital Pvt. Ltd. will offload shares valued at around Rs 272 crore. The IPO has a lot size of 17 shares at the upper end of the price band, putting the minimum investment for retail investors at Rs 14,807 for one lot.

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The basis of allotment is expected to be finalised on August 13, while the shares are tentatively scheduled to list on the NSE and BSE on August 17, 2026.

Axis Capital Ltd. is the book-running lead manager to the issue, while Kfin Technologies Ltd. is the registrar.

Dhoot Transmission IPO subscription details
The IPO saw robust demand on the final day of bidding, with the issue subscribed 5.04 times overall against 2.49 crore shares on offer.

The Retail Individual Investors (RIIs) category was subscribed 3.4 times, with 1.25 crore shares available for subscription.

Demand was significantly stronger in the Non-Institutional Investors (NIIs) segment, which was subscribed 14.59 times against 53.92 lakh shares on offer.

The Qualified Institutional Buyers (QIBs) category, meanwhile, was subscribed 50%, against 68.99 lakh shares reserved for the segment.

Dhoot Transmission IPO GMP today
The Dhoot Transmission IPO is commanding a grey market premium of around Rs 255, indicating a potential 30% premium over the upper end of the IPO price band.

At the current GMP, the stock could potentially list at around Rs 1,126 per share, compared with the IPO's upper price of Rs 871.

However, the grey market premium is an unofficial indicator and can change significantly before listing. It should not be treated as a guarantee of the actual listing price or the stock's performance after listing.

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Dhoot Transmission IPO proceeds
A large part of the net IPO proceeds, around Rs 464.80 crore, will go towards repaying or prepaying certain outstanding borrowings. The company will also infuse nearly Rs 301.77 crore into subsidiaries to help them reduce their debt.

Another Rs 150 crore has been earmarked for setting up new wiring harness manufacturing facilities.

The remaining proceeds will be used to pursue inorganic growth opportunities through acquisitions and for general corporate purposes.

Dhoot Transmission IPO analysts' view
AnandRathi Research has assigned a "Subscribe for Long Term" rating to the Dhoot Transmission IPO. Based on annualised FY26 earnings, the company is seeking a P/E multiple of 44.9x, with a post-issue market capitalisation of approximately Rs 1,78,161 million.

While the brokerage considers the valuation fairly priced, it has flagged high customer concentration and execution risks linked to expansion projects as key concerns.

Ventura Securities has also recommended investors "Subscribe" to the issue. The brokerage highlighted Dhoot Transmission's strong FY26 performance, growing contribution from EVs and its strategic focus on premiumisation and electrification.

Ventura said the company aims to increase content value per vehicle by expanding into areas such as battery packs and advanced driver assistance systems (ADAS), while also benefiting from increasingly stringent global emission standards.

The brokerage also pointed to the company's marquee customer base and diversified business mix as key strengths. Under Managing Director Rahul Radhavallabh Dhoot, who has more than 27 years of industry experience, the company is looking to strengthen its position in automotive E&E solutions and expand its growth opportunities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)