Effect of our expansion plan will be seen in FY24: Jitendra Divgi, MD, Divgi TorqTransfer Systems

Jitendra Divgi, MD, Divgi TorqTransfer Systems, is confident about a similar growth in his company as seen in last three years. Photo: www.divgi-tts.com

Pune-based Divgi TorqTransfer Systems Ltd, a company that provides automotive drivetrain components and solutions, made its stock market debut on Tuesday, 14 March 2023.

The shares were listed at a premium of 5.08 per cent or at Rs 620 on NSE over the issue price of Rs 590.

The Pune-based auto component manufacturer debuted flat at Rs 600 on BSE.

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Today, on 15 March, Divgi TorqTransfer Systems' shares closed at Rs 611.10 each, up 0.98 per cent on BSE in a weak Mumbai market.

Meanwhile, in a conversation with Zee Business Managing Editor Anil Singhvi today, Jitendra Divgi, managing director (MD) of Divgi TorqTransfer Systems, shared his expansion plans and business strategy after the stock hit bourses yesterday.

"Based on our strategy of agility and the speed of response, I am very optimistic about the similar growth that you have seen in the last three years. However, there is uncertainty as the world is busy in geopolitical issues," said Divgi.

Keeping the SEBI norms in view, we kept a steady 20% CAGR in the recent year despite the challenges like pandemic and economic uncertainties.

"Through private equity, we mobilised resources and did investments, and the result is in front of you. We are continuing on basis of that," he added.

Out of Rs 180 crore fund through the fresh issue, Rs 151 crore is going into capex. Speaking on that, Divgi said, "the impact of capex amount will be seen on our financials in FY24. Our schedule is on and we are trying to best utilise it."

When asked about its margin improvement, Divgi added that the company is trying to bring diversity to its portfolio.

"For that, we need to be into the mainstream and of course there are chances of competition and headwinds. Our performance will be different from our average automotive EBITDA. It is mainly because we operate on a systems level, and there is our intellectual property, technology, and global markets and in those global markets, we will get economic arbitrage," he added.

Divgi Torq was subscribed 5.44 times, with 7.83 times as many bids coming from qualified institutional investors.

The reserved component of the retail investors' quota brought in 4.31 times as much as the non-institutional bidders' quota, which was only booked 1.4 times.

Divgi Torq was founded in 1964 and is one of the few automotive component companies in India with the capability to develop and provide system-level transfer cases, torque couplers, and dual-clutch automatic transmission solutions.

It mainly caters to the passenger and small commercial vehicle industry but is also venturing into EV (electric vehicle) transmissions.

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