Dhoot Transmission

IPO Size: Rs. 3,067 cr

• Fresh Issue of Rs. 1,400 cr (i) to repay Rs. 767 cr of Rs. 915 cr gross debt (ii) capex Rs. 150 cr (iii) unidentified acquisitions and general corporate purposes
• Offer for Sale (OFS) of Rs.1,667 cr by 2 promoters – investor Bain (55% stake to drop to 43% post IPO) and by founder promoter (45% to shrink to 40%)

Price band: Rs. 829-871 per share

M cap: Rs. 17,816 cr, implying 17% dilution

IPO Date: Mon 10^th Aug to Wed 12^th Aug 2026, Listing Mon 17^th Aug 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Wiring Harness Maker for 2W and 3W

Dhoot Transmision is a Chhatrapati Sambhajinagar-based Bain Capital co-promoted electrical and electronics auto ancillary company, ranking #2 in Indian wiring harnesses market for two-wheeler (2W) and three-wheeler (3W), with a 41% market share. Within the electric 2W and 3W, it is the largest with 70% market share.

Wire harnesses account for 77% of company’s FY26 topline of Rs. 4,500 cr, with balance comprising battery packs, sensors and electronic controllers, and automotive switches.

By vehicle type, revenue is split 65% as 2W, 13% 3W and 22% CV, tractor, off-highway. 2W trio Bajaj, TVS, Hero account for 60% of company’s topline.

 

High Growth Visibility

As of date, company has 23 plants in India (spread across the auto belt of Maharashtra, Haryana, Tamil Nadu, Madhya Pradesh), and abroad (UK, Slovakia, Thailand) with close to 75% capacity utilization.  

Company has undertaken nearly Rs. 1,000 cr capex in the past 3 fiscals and Rs. 150 cr capex from fresh issue proceeds will augment capacity by 20%. Rising EV penetration, premiumisation, higher safety standards and automation in auto industry are likely to increase content per vehicle, leading to higher demand for company’s wire harness. Even the revenue from non-wire harness products has doubled in 2 years between FY24 to FY26 to Rs. 1,037 cr in FY26.

  

Healthy Financials

Revenue grew at 29% CAGR between FY23 to FY26, whereas net profit surged at 34% CAGR during these 3 fiscals. FY26 revenue rose 31% YoY to Rs. 4,525 cr as domestic auto industry demand grew post GST cuts and healthy monsoon last fiscal. Due to rising input costs being passed on to customers with a lag, growth in EBITDA excluding other income was lower at 20% YoY to Rs. 711 cr, translating into 15.6% EBITDA margin, down from 16.2% in FY25.

Due to exception expense of Rs. 12 cr, PAT growth was 12% YoY to Rs. 397 cr, implying 8.8% net margin and an EPS of Rs. 24, on an equity of Rs. 38 cr (face value Rs. 2 each). Net worth stood at Rs. 2,435 cr with net cash of Rs. 250 cr, and RoE of 33%, which will contract to early 20s post equity dilution.

 

‘Left Money on the Table’ Pricing

M cap of Rs. 17,816 cr and Enterprise Value of Rs. 16,868 cr lead to a PE multiple of nearly 35x, based on FY27E estimated EPS of close to Rs. 25. Peer Motherson Sumi Wiring with a larger topline of Rs. 12,000 cr, rising at 18% CAGR in past 3 fiscals, but lower margin (9% operating, 5.5% net) is ruling at a PE multiple of 39x, making Dhoot’s IPO pricing attractive, at about 15% lower, on relative basis.

YTD FY27 sales volume during Apr-Jul 2026 has risen 22% to 30% for company’s top3 2W customers (Bajaj, TVS, Hero) keeping Q1FY27 earnings outlook healthy.

 

Unusual Dealings with Bain

Very strange to see payment of Rs. 12 cr in FY26 to financial promoter Bain Capital, as ‘business strategy’ expenses. Post the IPO, company will be required to pay an additional Rs. 48 cr to Bain, under a mutual agreement, qualified as contingent liability. This is a very unusual arrangement and rarely seen with any financial promoter. On a larger picture, Bain owns 55% of the company and this looks like an avoidable ‘pocket change’.

In Mar 2026, company raised Rs. 1,022 cr from preferential allotment to Bain at Rs. 461.22 per share, whereas the IPO price, after just 5 months, is 89% higher. Wonder if this was also part of some prior understanding! No wonder then, in just 1.5 years of making the first investment in Dhoot in April 2025, Bain Capital is making an IRR of 49% via the part-exit in IPO.