Smallcap stock down by 7% after promoter plans to sell 4.57% stake worth upto ₹764 Cr

During Thursday’s trading session, the shares of one of India’s largest stationery and art products companies slumped 7 percent to Rs. 2,842.3 on BSE, following the announcement that the company’s promoter will sell ~4.57 percent stake worth up to Rs. 764 crores. 

With a market cap of Rs. 17,655.7 crores, at 02:27 p.m., the shares of DOMS Industries Limited were trading in the red at Rs. 2,909.3, down by nearly 4.8 percent, as against its previous closing price of Rs. 3,055.45. 

What’s the News? 

DOMS Industries Limited, through its latest regulatory filings with stock exchanges, announced that its promoter, FILA, will sell around 4.57 percent stake after the one-year lock-in for shareholders ended. 

FILA, the Italian stationery company, initiated the sale of shares in DOMS on Wednesday by way of an accelerated book building (ABB) process. This transaction will reduce FILA’s ownership in DOMS from 30.58 percent to 26.01 percent. 

The block trade has a base size of Rs. 510 crore, with an option to increase by an additional Rs. 254 crore, bringing the total potential size to Rs. 764 crore. Buyers of these shares will be subject to a 90-day lock-in period. 

The aim of this Placement is to increase the company’s free float, improve share liquidity, and attract new investors. Despite this reduction, DOMS will continue to represent a long-term strategic investment and a key industrial partner for FILA, which, therefore, intends to keep its stake in the company stable. 

As the company’s single largest shareholder upon completion of the Placement, FILA will maintain its “relevant shareholder” status according to the current governance structure. 

Financials: 

DOMS Industries reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 20 percent, rising from Rs. 382 crores in Q2 FY24 to Rs. 458 crores in Q2 FY25. 

Similarly, the company’s net profit increased from Rs. 38 crores to Rs. 54 crores over the same period, representing a rise of around 42 percent YoY. 

Stock Performance: 

During the year ended 31st March 2024, the company completed its Initial Public Offer (IPO), and its equity shares were listed on the NSE and on the BSE Limited on 20th December 2023. So far in 2024, the shares of DOMS Industries have delivered around 128.7 percent of multibagger returns. 

About the Company: 

Incorporated in 2006, DOMS Industries Limited is primarily engaged in the business of manufacturing, marketing, trading and distribution of stationery products. 

The company sells its products in India and in international markets, and its Indian manufacturing facilities are located at Umbergaon, Gujarat and Bari Brahma, Jammu & Kashmir. 

Written by Shivani Singh 

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