Dhoot Transmission IPO: Does 30% GMP make it a buy?
What's the story
The initial public offering (IPO) of Dhoot Transmission, worth ₹3,066.89 crore, has entered its second day of bidding today. The issue has already garnered a 30% premium in the gray market over its upper issue price. This suggests a strong listing gain potential. Market analysts have given a positive outlook on the IPO, suggesting that investors may want to subscribe to it.
Subscription update
How has the issue performed so far?
On its first day, the Dhoot Transmission IPO was subscribed 63% overall with 2.49 crore shares on offer.
The retail portion was in higher demand, getting subscribed 74% against the reserved 1.25 crore shares for retail investors.
The issue includes a fresh issue of 1.61 crore equity shares worth ₹1,400 crore and an Offer for Sale (OFS) of 1.91 crore shares aggregating ₹1,666.89 crore at the upper end of the price band.
Investment details
Retail investors will have to bid for minimum of ₹14,807
The company has set the IPO price band at ₹829-₹871 per share.
At the upper end of this price band, the IPO comes with a lot size of 17 shares. This means retail investors will have to invest at least ₹14,807 to bid for one lot.
The public issue will be open for subscription till August 12, 2026.
GMP insights
What is the gray market signal?
The current gray market premium (GMP) for the Dhoot Transmission IPO is around ₹259. This suggests a possible 30% premium over the upper end of the IPO price band.
Based on this GMP, the stock could list at around ₹1,130 per share against an upper price of ₹871 for the IPO.
However, investors should note that gray market premium is an unofficial indicator and can vary significantly ahead of listing.
Financial strategy
Company raised ₹918.27 crore from anchor investors ahead of IPO
On August 7, 2026, Dhoot Transmission raised ₹918.27 crore from 72 anchor investors ahead of its IPO.
The company plans to use the IPO proceeds to strengthen its balance sheet and fund future growth initiatives.
A major portion of the net proceeds, about ₹464.80 crore, will be used to repay or prepay certain outstanding borrowings while nearly ₹301.77 crore will be infused into subsidiaries, enabling them to reduce their debt.
Growth strategy
Funds will also be used for inorganic growth opportunities
Dhoot Transmission has also earmarked ₹150 crore to set up new wiring harness manufacturing facilities at Jhajjar, Haryana, and Shoolagiri, Hosur, Tamil Nadu.
The remaining funds will be used for inorganic growth opportunities through acquisitions and general corporate purposes.
Founded in April 1998, Dhoot Transmission is a leading electrical and electronics company providing wiring harnesses and electrical distribution systems for automotive and industrial applications.