IPO Analysis · Mainboard · 8 August 2026
A 41% market share, priced at a 35% discount.
Dhoot Transmission IPO · at a glance
2026
per share
per lot
size
Minimum application: 17 shares at the ₹871 cap = ₹14,807.
Of the total issue, ₹1,400 crore is a fresh issue reaching the company; the balance is an offer for sale to existing shareholders. The anchor book of ₹918.27 crore across 72 investors was allocated on 7 August 2026.
Valuation at the cap: 35.7x FY26 diluted EPS of ₹24.40, against a listed peer set at 43x–75x.
Key metricsRHP 3 Aug 2026
harness share
peers at 43–75x
of FY26 revenue
72 investors
The numbers behind the call
Revenue · ₹ crore
Compounding above 27% for three years. The top line is not the problem.
Source: RHP, restated consolidated financials
EBITDA margin
260 basis points gone in two years. This is the problem, and no balance-sheet adjustment fixes it.
Source: RHP, reconciliation of non-GAAP measures
P/E vs listed peers
Priced below every comparable in the prospectus peer set.
Source: RHP, closing prices 31 July 2026, FY26 diluted EPS
Revenue concentration · FY26
One customer is nearly a third of revenue. Top five have risen from 66.17% in FY24.
Source: RHP, revenue by customer
Dhoot leads India’s 2W and 3W wiring harness market and is priced below every listed peer. But one customer is a third of revenue, and margins are falling.
The business
Wiring harnesses — the cabling that carries power and signal through a vehicle. Dhoot holds 37.58% of India’s 2W harness market and above 70% of 3W, 41.03% combined. 22 plants, 495 customers, and EV-linked revenue already at 24.17% of the total.
The numbers
| Metric | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue (₹ cr) | 2,797.73 | 3,444.86 | 4,524.96 |
| PAT (₹ cr) | 298.75 | 353.89 | 396.84 |
| EBITDA margin | 18.31% | 17.15% | 15.71% |
| RoCE (reported) | 33.56% | 29.66% | 19.14% |
| RoCE (adjusted) | — | — | 27.83% |
Revenue grew 31.35% in FY26. Profit grew 12.14%. That gap is the story: material cost has climbed to 66.14% of revenue, subcontracting is up 53.92% and freight up 56.08%.
The return ratios are not the problem
Reported and adjusted return ratios, and the ₹1,022.56 crore of undeployed cash, are as disclosed in the Restated Consolidated Financial Information.
Everyone is quoting RoNW falling from 40.32% to 16.55%. That is mostly arithmetic. Net worth jumped because a pre-IPO share issuance left ₹1,022.56 crore of cash undeployed at year end. The prospectus gives the adjusted figures: RoE 28.10%, RoCE 27.83%.
What the adjustment does not fix is the margin. 15.71% is a P&L fact, and that is the real risk.
Valuation
The prospectus does not disclose a forward earnings estimate. Every multiple here is on FY26 reported earnings; no forward P/E is implied or calculated.
FY26 diluted EPS ₹24.40. At the ₹871 cap that is 35.7x.
| Company | P/E |
|---|---|
| Sona BLW | 74.64 |
| Industry composite | 55.31 |
| Minda Corporation | 46.49 |
| Motherson Sumi Wiring | 43.24 |
| Dhoot at ₹871 | 35.70 |
A discount to every comparable. That is the bull case — and the counter is that the discount may simply be the market pricing 31.84% customer concentration correctly.
Who is selling
Weighted average cost of acquisition for the selling shareholders is disclosed on the cover page of the prospectus.
The prospectus cover page gives the selling shareholders’ weighted average acquisition cost: BC Asia at ₹480.34, Mangalam Capital at ₹4.81. Against an offer price of ₹871.
Not an accusation — early holders in a 1998 company legitimately hold a low base, and a PE exit is the point. But only the ₹1,400 crore fresh issue reaches the business; the OFS is a transfer to existing holders.
Anchor report
Every anchor figure below is taken from that filing. Lock-in dates are calculated from the allotment date under SEBI rules.
Dhoot Transmission · anchor allocation
Source: company allocation filing to BSE and NSE, 7 August 2026
1,05,42,657 shares at ₹871. Domestic mutual funds took 64,59,984 shares across 46 schemes from 8 fund houses. Life insurance and pension funds took a further 9,21,895 shares, or ₹80.30 crore.
Largest allocations: ICICI Prudential Smallcap 7.81%, SBI Multicap 5.99%, Ashoka WhiteOak Emerging Markets 4.90%, Mirae Asset Focused 4.90%.
Two names worth isolating. At serial 25 sits Government Pension Fund Global — the formal name of Norway’s sovereign wealth fund, the largest in the world. At serial 65 sits the Edelweiss Recently Listed IPO Fund, a vehicle whose mandate is trading newly listed stock. Not every rupee of that ₹918 crore is long-term conviction money.
SBI’s Automotive Opportunities Fund took ₹25 crore — a sector specialist with more domain knowledge than a generalist multicap.
Lock-in: 50% of the anchor allotment locks for 90 days, the remaining 50% for 30 days. That is roughly ₹459 crore of potential supply around mid-September and ₹459 crore around mid-November.
Pros and cons
Pros
- Franchise position: 37.58% of India’s 2W wiring harness market, above 70% of 3W, 41.03% combined
- Priced at 35.7x against a peer set at 43x–75x — a discount to every listed comparable
- Adjusted RoE of 28.10% and adjusted RoCE of 27.83% once undeployed cash is excluded
- Net cash balance sheet: net debt to EBITDA of −0.25, against 1.29 a year earlier
- PAT compounded 32.84% over three years; revenue above 27%
- EV-linked revenue already 24.17% of total, with harness content per electric 2W at 1.5–2.5x an ICE equivalent
- 13-year average relationship with the top five customers, with switching costs the prospectus sets out in detail
- ₹1,400 crore of fresh issue money reaching the business, funding two new plants
Cons
- Bajaj Auto alone is 31.84% of FY26 revenue; the top five are 71.56% and rising from 66.17% in FY24
- EBITDA margin has shed roughly 260 basis points in two years, to 15.71%
- Revenue grew 31.35% in FY26 while profit grew only 12.14%
- Material cost has climbed to 66.14% of revenue; subcontracting up 53.92% and freight up 56.08%
- No firm long-term supply contracts in a copper-linked business; top 10 suppliers are 43.66% of purchases
- Thailand plant at 14.36% capacity utilisation for three straight years; Slovakia at 36.67%
- India is 90.14% of revenue and rising; exports have fallen from 12.83% to 9.47%
- Inventory days up from 67 to 76; borrowings of ₹841.39 crore
- Up to 10% of gross proceeds earmarked for acquisitions that have not been identified
- Selling shareholder cost basis of ₹4.81 and ₹480.34 against an offer price of ₹871; only the fresh issue reaches the company
The verdict, and what would change it
Applying — for the valuation gap, not the grey market premium.
The case rests on four things, in order of weight:
- A franchise position. 37.58% of 2W and above 70% of 3W wiring harness in the largest 2W market on earth. Thirteen-year average customer relationships with switching costs the prospectus describes in detail.
- A valuation discount to every listed comparable. 35.7x against 43x–75x, with adjusted RoE of 28.10%.
- A structural tailwind that is already in the numbers. EV mix at 24.17%, content per EV at 1.5–2.5x ICE, 2W EV penetration forecast to quadruple by FY31.
- A net-cash balance sheet heading into a capex cycle, with ₹1,400 crore of fresh capital arriving.
The case against is narrower but sharper: one customer is a third of revenue, margins are compressing, and the company has no long-term supply contracts in a copper-linked business.
What I am watching after listing
- EBITDA margin in Q2 and Q3 FY27. Stabilising above 15% means FY26 was a capex-and-ramp trough. Breaking below means the moat is thinner than the market share suggests. This is the single most important number.
- Material cost as a percentage of revenue. 66.14% in FY26. If it holds or falls, the margin story resolves. If it climbs past 67%, pricing power is going the wrong way.
- Subcontracting and freight growth rates. Both grew at ~55% against 31% revenue growth. Once Jhajjar and Hosur are live, these should normalise. If they don’t, the capacity story isn't working.
- Bajaj Auto’s share of revenue. Falling is a re-rating trigger. Rising past 33% is a de-rating one.
- Inventory days. 76 today, up from 67 two years ago. This is the working-capital line that is actually moving. Receivable days are flat at 64 with nil bad debt, and need less attention than most commentary suggests.
- Deployment of the ₹1,022.56 crore. The adjusted RoCE of 27.83% is only meaningful if that cash gets put to work at a comparable return. If it sits idle another year, the reported ratio stops being an artefact and starts being the truth.
- What they buy with the acquisition tranche, and whether they buy anything at all.
- Jhajjar and Hosur against the August 2027 commissioning date.
Strong anchor participation tells you sophisticated buyers did the work and reached a conclusion. It does not tell you what price you should pay, or how long you should stay.
Not SEBI registered. This is not investment advice and is not a recommendation to buy or sell any security. All figures are sourced from the Red Herring Prospectus of Dhoot Transmission Limited dated 3 August 2026 and the company’s anchor allocation filing to BSE and NSE dated 7 August 2026. Conversions from ₹ million to ₹ crore are my own. Please read the prospectus and conduct your own research before investing.
A listing scorecard for this call will be published on 18 August 2026, regardless of outcome.