Divgi TorqTransfer Raises Rs 185 Crore From Anchor Investors Ahead Of IPO

Auto component maker Divgi TorqTransfer Systems Ltd. allotted 31.43 lakh shares to 12 anchor investors on Tuesday, a day before launching its maiden share sale.

The company allotted the shares at Rs 590 apiece—the higher end of the initial public offering's price band—to raise Rs 185.45 crore from the anchor portion.

The anchor portion saw participation from ICICI Prudential Mutual Fund, Nippon India Mutual Fund, Quant Mutual Fund, Edelweiss Mutual Fund and Motilal Oswal Mutual Fund. Aditya Birla Sun Life AMC Ltd., Matthews Asia Funds, Aurigin Master Fund Ltd. and Bengal Finance and Investment Pvt. also participated in the anchor round.

Through eight schemes, the five mutual funds received 24.41 lakh shares under the anchor portion. This aggregated to Rs 144 crore or 77.65% of the anchor investor portion.

Divgi TorqTransfer will launch its IPO on Wednesday and close the issue on Friday. The company is looking to raise funds to finance its capital expenditure plans.

Proceeds of almost Rs 151 crore from the sale of new shares will be used to finance the capital expenditure needed to purchase equipment or machinery. The rest will be utilised towards general corporate purposes.

The IPO comprises a fresh issue of Rs 180 crore and an offer for sale of up to 39.34 lakh shares by investors and other selling shareholders at a price band of Rs 560–590 apiece. The OFS portion is expected to raise between Rs 220 crore and Rs 232 crore. The issue size is around Rs 412 crore.

Divgi TorqTransfer makes transfer case systems, torque coupler and dual-clutch transmission solutions. The firm also produces torque transfer systems, including both four-wheel drive and all-wheel drive, synchroniser systems for manual transmissions and dual-clutch transmission, and can also develop transmission systems for electric vehicles.

Its clientele includes Mahindra & Mahindra Ltd. and Tata Motors Ltd. as well as global supplier like BorgWarner Inc.