DCX Systems
Mainboard₹500 Cr issue
+38.29%
Listing gain over issue price
Issue size
₹500 Cr
1 lot at cut-off
₹14,904
Lot size
72shares
Open
31 Oct 2022
Close
02 Nov 2022
Allotment
07 Nov 2022
Listing
11 Nov 2022
Listing performance
Issue price
₹207
Listed at
₹286.25
Listing-day close
₹308.80
Latest price
₹132.91
Close on 23 Oct 2026
Listing gain
+38.29%
Return since issue
-35.79%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 31 Oct 2022 – 02 Nov 2022
- Listing date
- 11 Nov 2022
- Face value
- ₹2 per share
- Issue price
- ₹207 per share
- Lot size
- 72 shares
- Total issue size
- ₹500 Cr
- Market cap at offer price
- ₹2,002 Cr
- Promoter holding
- 95.88% → 73.58% pre-issue → post-issue
- ISIN
- INE0KL801015
- Registrar
- MUFG Intime India Pvt.Ltd.
- Lead managers
- Edelweiss Financial Services Ltd.
- Registered office
- Aerospace SEZ Sector, Plot Numbers 29, 30 and 107, Hitech Defence and Aerospace Park, Kavadadasanahal, Village, Devanahalli Taluk, Karnataka
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 1,08,69,564 | — | — |
| Market maker | 0 | — | — |
Application size
Minimum 72 shares per lot, in multiples, at ₹207
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 72 | ₹14,904 |
| Retail (max) | 13 | 936 | ₹1,93,752 |
| S-HNI (min) | 14 | 1,008 | ₹2,08,656 |
| S-HNI (max) | 67 | 4,824 | ₹9,98,568 |
| B-HNI (min) | 68 | 4,896 | ₹10,13,472 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
1,08,69,564
Anchor portion
₹225 Cr
at ₹207 per share
Valuation and performance
Valuation at offer price
₹207 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 9.19 | — |
| P/E (×) | 22.52 | — |
| Market cap | — | ₹2,002 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 55.79%
- ROCE
- 13.15%
- Debt / equity
- 4.27
- PAT margin
- 5.84%
- EBITDA margin
- 7.61%
- NAV per share
- ₹15.19
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About DCX Systems
DCX Systems Limited, incorporated in 2011 as a private limited company and converted to public limited in February 2022, is among the leading Indian players for the manufacture of electronic sub-systems and cable harnesses in the defence and aerospace sector. The company commenced operations in 2011 and has been a preferred Indian Offset Partner for foreign original equipment manufacturers executing aerospace and defence manufacturing projects. Over the years, it has expanded its manufacturing capabilities and grown its order book. As of June 30, 2022, the company had 26 customers in Israel, United States, Korea and India. The company operates a single manufacturing facility in Hi-Tech Defence and Aerospace Park, SEZ, Bengaluru, Karnataka.
Company Analysis
from RHPDCX Systems Limited manufactures electronic sub-systems and cable harnesses for the Indian defence and aerospace sectors.
DCX Systems Limited, incorporated in 2011 as a private limited company and converted to public limited in February 2022, is among the leading Indian players for the manufacture of electronic sub-systems and cable harnesses in the defence and aerospace sector. The company commenced operations in 2011 and has been a preferred Indian Offset Partner for foreign original equipment manufacturers executing aerospace and defence manufacturing projects. Over the years, it has expanded its manufacturing capabilities and grown its order book. As of June 30, 2022, the company had 26 customers in Israel, United States, Korea and India. The company operates a single manufacturing facility in Hi-Tech Defence and Aerospace Park, SEZ, Bengaluru, Karnataka.
Defence manufacturingAerospaceElectronic sub-systemsCable and wire harness manufacturing
Objects of the Issue
- Repayment/prepayment, in full or part, of certain borrowings availed of by our Company ₹1,100.00 million p.22
- Funding working capital requirements of our Company ₹1,600.00 million p.23
- Investment in our wholly owned Subsidiary, Raneal Advanced Systems Private Limited, to fund its capital expenditure expenses ₹448.83 million p.23
- General corporate purposes p.23
- Repayment or prepayment of certain borrowings availed by the Company p.49
- Funding working capital requirements of the Company p.49
- Investment in wholly owned Subsidiary Raneal Advanced Systems Private Limited to fund its capital expenditure expenses p.49
- General corporate purposes p.49
- Repayment/prepayment, in full or part, of certain borrowings availed of by our Company ₹1,100.00 million p.103
- Funding working capital requirements of our Company ₹1,600.00 million p.105
- Investment in our wholly owned Subsidiary, Raneal Advanced Systems Private Limited, to fund its capital expenditure expenses ₹448.83 million p.107
- General corporate purposes p.112
- Setting up of an Electronic Manufacturing Services (EMS) facility p.174
- Investment in our wholly owned Subsidiary, Raneal Advanced Systems Private Limited, to fund its capital expenditure expenses for setting up a manufacturing facility for Electronics Manufacturing Services (EMS) ₹ 448.83 million p.309
Issue Structure
- Total Issue
- ₹5,000.00 million
- Fresh Issue
- ₹4,000.00 million
- Offer for Sale
- ₹1,000.00 million
- Price Band
- [●] per Equity Share (Floor Price ₹[●], Cap Price ₹[●])
- Lot Size
- [●] Equity Shares (Bid Lot)
- Face Value
- ₹2.00 per Equity Share
Business Model
The company generates revenue through two primary verticals: (1) system integration business involving manufacture and supply of electronic sub-systems for defence and aerospace, and (2) cable and wire harness assemblies. Revenue is primarily derived from offset defence contracts with foreign OEMs and their Indian offset partners. The company manufactures products on a project basis under purchase orders from customers, typically sourcing raw materials from customer-approved suppliers and performing work under multi-year contracts.
Business Segments
Manufacture and supply of electronic sub-systems for defence and aerospace applications
Manufacture and supply of cable and wire harness assemblies for defence and aerospace applications
Manufacturing of cable and wire harness assemblies customized to customer specifications for defence and aerospace applications
System integration projects for defence and aerospace industry customers
Electronics Manufacturing Services for PCB assembly through subsidiary Raneal Advanced Systems Private Limited
Provides integrated solutions and services for defence and aerospace platforms; acts as a system integrator in defence offset contracts and Make in India initiatives
Manufactures specialized cable and wire harness assemblies for communication systems, sensors, surveillance systems, missile systems, military armoured vehicles, air defence systems, reconnaissance and observation systems, multifunction displays, and electronic warfare systems
Manufactures printed circuit board assemblies; setting up Electronics Manufacturing Services (EMS) facility at SEZ Aerospace Park, Devanahalli, Bengaluru
Undertakes system integration in areas of radar systems, sensors, electronic warfare, missiles, and communication systems. Provides product assembly and system integration services of various complexities to address customers' requirements. Part of comprehensive array of electronics and electro-mechanical assembly and enclosure assembly. Also provides product repair support.
Manufactures a comprehensive array of cables and wire harnesses assemblies such as radio frequency cables, co-axial, mixed signal, power, and data cables for communication systems, sensors, surveillance systems, missile systems, military armored vehicles, and other electronic warfare systems for the aerospace and defence industries.
Supply assembly ready kits of electronic and electro-mechanical parts and undertake all aspects of procurement including sourcing components from suppliers approved by customers along with Certificate of Compliance for traceability, controlled storage of moisture sensitive devices to ensure customers receive complete, assembly-ready kits.
Manufactures and sells electronic systems and cable harnesses assemblies for defense and aerospace applications to both international and domestic customers
Undertake system integration in areas of radar systems, sensors, electronic warfare, missiles, and communication systems. 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. Also provides product repair support for the parts manufactured.
Manufacture 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 customers' requirements.
Supply assembly ready kits of electronic and electro-mechanical parts and undertake all aspects of procurement including sourcing components from suppliers approved by 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.
Manufacturing of electronic sub-systems and cable harness for aerospace and defence applications
SWOT Analysis
Strengths
- • Leading Indian player in defence/aerospace electronics manufacturing(p.22)
- • Preferred offset partner for foreign OEM manufacturers(p.22)
- • Expanding order book demonstrating market traction(p.33)
- • Significant export credentials as Indian defence manufacturer(p.38)
- • Among preferred Indian Offset Players for defence and aerospace with global accreditations(p.116)
- • Technology-enabled and scalable end-to-end capabilities(p.116)
- • Business model with visibility of cash flows and ability to mitigate operational and technology risk(p.116)
- • Strategically located in Special Aerospace Economic Zone with advanced and modern manufacturing facility(p.116)
- • Well-positioned to capitalize on industry tailwinds(p.116)
- • Track record of consistent financial performance(p.116)
- • Experienced and qualified Promoters and senior management team supported by committed employee base(p.116)
- • Largest Indian Offset Player for Israel Aerospace Industries Group for defence electronics(p.151)
- • Leading Indian player in electronic sub-systems and cable harness manufacturing with strong OEM relationships(p.167)
- • Preferred Indian Offset Partner for foreign OEMs with multiple global certifications(p.169)
- • Significant order book visibility with long-term customer relationships(p.168)
- • Rapid revenue growth with strong profitability trajectory(p.166)
- • Advanced manufacturing facility in strategically located aerospace SEZ with in-house testing capabilities(p.171)
- • Diverse revenue streams across system integration, cable harnesses, kitting and emerging EMS/MRO segments(p.158)
- • High return on equity with strong balance sheet growth(p.166)
- • Leading Indian player in defence/aerospace electronics manufacturing(p.303)
- • Strong revenue growth trajectory(p.303)
- • Largest IOP for major Israeli aerospace defence firms(p.303)
- • Experienced management with defence sector expertise(p.304)
- • Substantial order book across multiple verticals(p.304)
- • Diversified customer base including Fortune 500 companies(p.305)
Weaknesses
- • Extreme customer concentration with top 3 customers representing 96.83% of revenue(p.31)
- • Heavy reliance on offset defence contracts (64.54% of revenue)(p.32)
- • High supplier concentration with top 5 suppliers representing 90.52% of purchases(p.33)
- • Negative operating cash flows in recent periods(p.38)
- • High debt-to-equity ratio of 4.05 as of June 30, 2022(p.42)
- • High contingent liabilities representing 393.65% of net worth(p.40)
- • Past covenant breaches and financing restrictions(p.39)
- • Single manufacturing facility concentration risk(p.36)
- • No ownership of DCX brand name(p.36)
- • Labour shortage and wage inflation risks(p.45)
- • Increasing manpower costs impacting margins(p.45)
- • Quality compliance risks with suppliers(p.45)
- • Concentrated promoter shareholding and control(p.45)
- • Promoter litigation history(p.46)
- • Dependence on third-party transportation providers(p.46)
- • Related party transaction conflicts(p.47)
- • Missing historical corporate records(p.48)
- • Educational qualification verification issues for key personnel(p.49)
- • Leasehold facility with renewal uncertainty(p.50)
- • Counterparty credit risk and receivables collection(p.50)
- • Financial comparability issues post-acquisition(p.51)
- • Earnings volatility from contract mix(p.51)
- • Supplier performance dependency(p.50)
- • Capacity utilization uncertainty(p.52)
- • Dependency on key personnel(p.55)
- • Technical knowledge confidentiality risks(p.53)
- • No registered intellectual property protections(p.60)
- • Concentrated customer base dependent on Israeli customers(p.151)
- • Proposed significant capital expenditure with technology and execution risks at new EMS facility(p.102)
- • Heavy dependence on top three customers for majority of revenue(p.189)
- • Concentration of manufacturing facility in single location creates operational vulnerability(p.168)
- • High supplier concentration risk with top supplier representing significant portion of raw material purchases(p.188)
- • Intellectual property not owned; operates under brand name via no-objection letter only(p.191)
- • Leasehold property with no owned manufacturing facility(p.194)
- • Limited scale relative to larger established competitors with lower EBITDA margins historically(p.172)
- • High borrowing and debt levels(p.299)
- • Dependence on few key customers for revenue(p.305)
- • Risk of liquidated damages and performance guarantee invocation(p.309)
- • Exposure to significant foreign exchange risk(p.282)
- • Limited skilled workforce and manpower availability risk(p.309)
- • Negative operating cash flow in recent periods(p.330)
- • High debt burden with elevated leverage ratio(p.332)
- • Significant reliance on short-term packing credit facility(p.332)
- • Large contingent liabilities from bank guarantees(p.333)
- • Concentration of material creditors(p.339)
Opportunities
- • Large defence modernization spending in India(p.22)
- • Government focus on 'Make in India' in defence sector(p.22)
- • Expansion into EMS facility for new market segments(p.37)
- • Opportunity to leverage offset partnership model with international OEMs(p.22)
- • Expansion into new business verticals(p.59)
- • Capacity expansion and investment(p.52)
- • Government incentive schemes benefits(p.52)
- • Indian defence electronics market growing at 13.71% CAGR from 2022-2030 to reach US$ 7.2 billion(p.157)
- • Government policy targeting 68% of defence capital procurement budget for domestic industry(p.157)
- • Indian defence budget growing at 14.3% CAGR from FY 2017 to FY 2023 with continued modernization programs(p.137)
- • Positive Indigenisation lists banning import of 780+ defence electronics and LRU items to drive domestic procurement(p.157)
- • Significant Indian defence modernization programs in air, naval and army segments requiring electronics and integrated systems(p.139)
- • Global defence electronics market growing at 6.6% CAGR to reach US$ 237 billion by 2030(p.153)
- • Indian defence electronics market growing at ~50% CAGR with government push for indigenization(p.160)
- • Cable harness market expansion driven by increased indigenization of defence production(p.159)
- • Significant growth in radar systems market as India transitions from passive to active radar solutions(p.160)
- • FDI liberalization increasing from 49% to 74% under automatic route driving foreign OEM investments(p.172)
- • India positioned as preferred 'China+1' destination for electronics manufacturing(p.159)
- • MRO market opportunity expanding with growing commercial aircraft fleet and aging defence platforms(p.161)
- • Defence offset obligations and technology transfer creating opportunities for local manufacturing(p.174)
- • Rising global military expenditure particularly in Europe driven by geopolitical tensions(p.175)
- • Growing Indian defence budget and indigenization push(p.306)
- • FDI limit increase and defence industry corridors(p.304)
- • Major government import bans driving domestic manufacturing(p.304)
- • Expansion of manufacturing capabilities through new facility(p.309)
- • Large market size and defence exports growth potential(p.303)
- • Aerospace and defence sector growth(p.336)
- • Export authorizations to international defence customers(p.342)
Threats
- • Changes to offset defence policy reducing contract opportunities(p.32)
- • Customer order cancellations, delays or modifications(p.33)
- • Raw material supply disruptions and price volatility(p.33)
- • Foreign currency exchange rate fluctuation risks(p.37)
- • Intense competition in electronics and defence manufacturing(p.41)
- • Ongoing COVID-19 pandemic impacts on operations and supply chain(p.41)
- • Group company DCX Chol debarment risk from US defence procurement(p.43)
- • Ukraine conflict impacting electronic component supply chain(p.33)
- • Indian defence budget delays or reprioritization(p.32)
- • Monsoon and weather-related transportation disruptions(p.46)
- • Regulatory and compliance changes(p.52)
- • Loss of government certifications(p.51)
- • Policy changes affecting SEZ benefits(p.52)
- • Export control restrictions(p.60)
- • Natural disasters and epidemics(p.63)
- • Geopolitical risks and civil unrest(p.63)
- • Global financial instability spillovers(p.64)
- • Inflation pressures on costs(p.65)
- • Indian tax law changes(p.65)
- • Competition law application risks(p.63)
- • Cyber security threats(p.54)
- • Power and fuel supply disruptions(p.57)
- • High dependence on Israeli OEM customers for 56% of revenues creates concentration and geopolitical risk(p.151)
- • Global defence electronics market facing semiconductor supply chain vulnerabilities and chip shortages(p.152)
- • Intense competition and barriers to entry from large DPSUs and established Tier-1 defence players(p.133)
- • Technology capability gaps and long gestation periods required for defence manufacturing infrastructure(p.136)
- • Indian defence import substitution policies may reduce opportunities for imported Israeli technology and systems(p.146)
- • Order book may not translate to revenue if orders are modified, cancelled or delayed(p.187)
- • Heavy export concentration (55.73% in FY2022) creates foreign exchange and geopolitical risks(p.190)
- • Intense competition from established players in defence electronics manufacturing(p.194)
- • Regulatory risks and compliance requirements in defence sector(p.191)
- • Supply chain disruptions from dependence on international raw material suppliers(p.188)
- • Loss or non-renewal of leasehold rights could terminate business operations(p.46)
- • Technology obsolescence risk in defence electronics sector requiring continuous investment(p.159)
- • Dependence on global supply chains for raw materials(p.308)
- • Foreign exchange rate volatility affecting margins(p.282)
- • Interest rate risk on floating rate borrowings(p.283)
- • Industry cyclicality and government policy changes(p.309)
- • Regulatory and compliance risks in defence sector(p.309)
- • Ongoing COVID-19 impact on business operations(p.333)
- • Exposure to credit risk from customers(p.334)
- • Foreign currency exchange rate risk(p.335)
- • Interest rate risk on floating rate debt(p.335)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Dr. H.S. Raghavendra Rao | Individual Promoter | 9.56% | — |
| NCBG Holdings Inc. | Promoter Selling Shareholder | 44.32% | — |
| VNG Technology Private Limited | Promoter Selling Shareholder | 44.32% | — |
| NCBG Holdings Inc. | Promoter | 34,300,000 Equity Shares (44.32%) | — |
| VNG Technology Private Limited | Promoter | 34,300,000 Equity Shares (44.32%) | — |
| Dr. H.S. Raghavendra Rao | Promoter | 7,400,000 Equity Shares (9.56%) | — |
| Dr. H S Raghavendra Rao | Promoter | 9.56% | — |
| VNG Technology Private Limited | Promoter Group | 44.32% | — |
| NCBG Holdings Inc. | Promoter Group | 44.32% | — |
| Dr. H.S. Raghavendra Rao | Individual Promoter/Chairman and Managing Director | — | — |
| VNG Technology Private Limited | Corporate Promoter/Promoter Group | — | — |
| NCBG Holdings Inc. | Corporate Promoter/Promoter Group | — | — |
| Dr. H.S. Raghavendra Rao | Individual Promoter | 9.56% | — |
| NCBG Holdings Inc. | Corporate Promoter | 26% | — |
| VNG Technology Private Limited | Corporate Promoter | 51% | — |
| H.S. Raghavendra Rao | Individual Promoter | — | — |
| Dr. H.S. Raghavendra Rao | Individual Promoter | — | — |
Leadership
Dr. H.S. Raghavendra Rao · Chairman and Managing Director
Ranga KS · Chief Financial Officer
Nagaraj R Dhavaskar · Company Secretary, Legal and Compliance Officer
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
DCX Systems IPO FAQs
What is the lot size of DCX Systems IPO?
The minimum lot size of DCX Systems IPO is 72 shares. One lot costs ₹14,904 at the cut-off price.
When does DCX Systems IPO open and close?
DCX Systems IPO opened for subscription on 31 Oct 2022 and closed on 02 Nov 2022.
What is the listing date of DCX Systems IPO?
DCX Systems IPO listed on 11 Nov 2022.