Dhoot Transmission’s ₹3,067 crore IPO is open for subscription from August 10 to August 12, 2026. The company, which holds a 41% market share in the two-wheeler and three-wheeler wiring harness segment, aims to use funds for debt reduction and capacity expansion. Investors are evaluating the firm's growth in the EV space against risks like sectoral concentration.
Dhoot Transmission has launched its initial public offering (IPO), inviting subscriptions between August 10 and August 12, 2026. The company has set a price band of ₹829 to ₹871 per equity share. The total issue size stands at ₹3,067 crore, which includes a fresh issue of ₹1,400 crore and an offer for sale (OFS) of ₹1,667 crore by existing shareholders. Ahead of the public issue, the company secured ₹918.27 crore from anchor investors.
Growth Driven by EV Transition
The company’s primary investment narrative revolves around its strong position in the automotive component market. With a 41% market share in India's two-wheeler and three-wheeler wiring harness sector, Dhoot Transmission has benefited significantly from the industry's shift toward electric vehicles (EVs). Management notes that wiring harness content in EVs is estimated to be 1.5 to 2.5 times higher than in traditional internal combustion engine vehicles, providing a tailwind for revenue growth. The company’s revenue reached ₹4,525 crore in FY26, reflecting the impact of this transition along with expanded product offerings such as sensors and controllers.
Financial Strategy and Use of Funds
Part of the capital raised through the fresh issue is designated for deleveraging the balance sheet. The company plans to utilize ₹750 crore for debt repayment, which is expected to improve its financial flexibility. Additionally, ₹150 crore is allocated to set up two new wiring harness manufacturing plants in Haryana and Tamil Nadu. These facilities aim to increase the company’s total production capacity from 13 million units to 16 million units annually. The expansion is a critical monitorable for investors, as the company currently operates at a capacity utilization rate of approximately 76 percent.
Market Position and Risks
While the company has secured strong relationships with major original equipment manufacturers (OEMs) like Bajaj Auto, TVS, and Honda, its business model carries specific risks. A significant 78% of the company's revenue is derived from the two-wheeler and three-wheeler segments. This creates a high dependence on the cyclical demand of the automotive sector. Furthermore, contracts with automotive manufacturers are typically based on immediate requirements rather than long-term volume guarantees, which could affect revenue predictability. Investors should also note the risk of potential profit margin compression, as fluctuations in raw material prices remain a persistent challenge in the automotive supply chain.
Valuation and Peer Comparison
At the upper price band of ₹871, the IPO is valued at a price-to-earnings (P/E) multiple of approximately 45 times. This valuation is broadly in line with listed automotive component peers such as Minda Corporation and Motherson Sumi Wiring, which have also traded around similar multiples in recent periods. Whether the company can maintain its growth trajectory and justify this valuation will depend on the successful commissioning of its new plants and the continued adoption rate of electric two-wheelers in the Indian market. The shares are tentatively scheduled to be listed on the NSE and BSE on August 17, 2026.