DCX Systems to launch a Rs 500 crore IPO: Here's all you need to know

DCX Systems is set to conduct its IPO process between October 31 and November 2, 2022, to raise about Rs 500 crore. Here's more about the IPO, what the company does and what its financials look like.

First, the important details about the IPO:

• IPO size: Fresh issue worth Rs 400 crore and sale of existing shares worth Rs 100 crore
• IPO share price range: Rs 197 to 207 per share
• Number of shares you need to buy when you subscribe for 1 lot: 72 shares 
• The minimum investment for a retail investor (like you and me): 1 lot - Rs 14,904
• Maximum investment for a retail investor: 13 lots - Rs 193,752. (Since retail investors can only invest up to Rs 200,000)
• 75% of the IPO quota is reserved for Qualified Institutional Buyers (QIB) ie banks and mutual funds, 15% is reserved for High Net-worth Individuals (HNIs) and 15% is for us; ie retail-category investors. 

Second, the IPO's important dates:

• The IPO process begins on October 31, 2022 
• The IPO closes on November 2, 2022
• The allotment will be decided on November 7, 2022
• If you are not allotted shares, your money will be refunded on November 9, 2022
• If you are allotted shares, they will be credited to your Demat account by November 10, 2022
• The IPO will list on the NSE and BSE on November 11, 2022.

What does DCX Systems do? DCX Systems Limited is in the business of manufacturing electronic sub-systems and cable harnesses. The business operates in three main segments: 

1. System integration: DCX's products help in completing systems as it provides system integration services for defence, aerospace and industrial product equipment. It provides radar systems, sensors, electronic warfare, missiles, and communication systems.

2. Cable assemblies: DCX manufactures build-to-print and customised cable & wire harness assemblies to integrate multiple systems together. Their wires are mostly used in the aerospace and defence industries. 

3. Kitting: The company supplies assembly-ready kits of electronic and electro-mechanical parts.

In 2020, DCX commissioned a new manufacturing facility at the Hi-Tech Defence and Aerospace Park SEZ in Bengaluru, Karnataka. As of June 30, 2022, DCX Systems had 26 customers in Israel, the United States, Korea and India, including certain Fortune 500 companies, multinational corporations and start-ups. The company's customers include domestic and international OEMs, private companies and public sector undertakings in India across different sectors, ranging from defence and aerospace to space ventures and railways.

Why does DCX Systems need an IPO? DCX Systems plans to use the IPO proceeds towards:

• Repayment/prepayment, in full or part, of certain borrowings availed of by DCX Systems.
• 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.

The company's financial health: (Rs in crores)

Since the Indian government has been rooting for various initiatives to manufacture more products in India and is also liberalizing policies, DCX Systems might see a good IPO run.