Divgi Torqtransfer Systems IPO

Segment Leader & Expertise: Divgi is one of the very few suppliers in India having the capability to develop system level transfer case, torque coupler, DCT solutions and transmission systems for EVs across a wide array of automotive vehicles and geographies, with leadership across select product categories.

Location: : The co has strategically located manufacturing facilities close to key customers, capable of producing high precision components meeting system-level design intent.

Established Relationships:: They have strong and well established relationships with several marquee domestic and global OEMs in the automobile sector such as Tata Motors, Mahindra & Mahindra and with global suppliers such as BorgWarner for over two decades.

Experienced Management: : The co is led by a highly experienced board of directors, and a professional and experienced management team with extensive experience in the automotive industry. Promoters Jitendra Bhaskar Divgi and Hirendra Bhaskar Divgi, are mechanical engineers with considerable experience in the automotive industry.

Strong Financial Performance: : They have established a track record of growth and financial performance with steady cash flows from operations. Between Fiscal 2020 and Fiscal 2022, profit after tax increased at a CAGR of 28.30%

Strong R&D Capabilities: : They have invested in R&D, in building production capacities for future growth and developed in-house capabilities to deliver evolving technologies for future mobility solutions.

Customer Concentration:: The company has top five key customers it depends on, a risk to any one of these can derail their revenues.

New Technology: : The company products depend on R&D and development of new technology which is time consuming and costly, any failure to develop new technology can lead to loss of market share.

Third Party Suppliers: : The company depends on third party suppliers for components, any disruption in supply chain can impact deliveries and cost.

Extended Credit: : The market segment operates on extending credit to customers and risk of delay in receivables impacting revenues and operations.