DCX Systems shares witnessed a premium listing on Friday as shares debuted at Rs 286 on BSE, up 38% from the IPO price of Rs 207, while the listing price on the National Stock Exchange was Rs 287. Ahead of the listing, DCX Systems shares were trading at 36-41% premium in the grey market. “The company’s strong listing can be attributed to unexciting investor subscription levels. As the company has been able to create long-term and deeply entrenched relationships with its clients due to its execution capability in terms of time & cost, ability to maintain confidentiality, and experienced management team,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

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Analysts are largely bullish on the company as its strong order book gives revenue visibility. The listing premium was justified on the back of reasonable valuations, according to Prashanth Tapse, Senior VP Research at Mehta Equities, “Demand in aerospace and defence sectors is well supported by Government under Make in India and Atma Nirbhar Bharat program,” he said.

The IPO of DCX Systems received stellar response from investors. It was oversubscribed 69.79 times, with retail investors bidding for 61.77 times the allocated quota, non-institutional investors 43.97 times, and the reserved portion of qualified institutional buyers (QIBs) being oversubscribed 84.32 times. The company raised Rs 500 crore via the public issue for which the price band was fixed at Rs 197-207 per share.

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DCX Systems is primarily engaged in systems integration and manufacturing a comprehensive array of cables and wire harness assemblies, and is also involved in kitting. It has been a preferred Indian Offset Partner (IOP) for foreign original equipment manufacturers (OEMs) for executing aerospace and defence manufacturing projects. Its order book has grown from Rs 1,941.31 crore as of March 2020, to Rs 2,369 crore as of March 2022. As of June 2022, the order book comprised 42 orders worth Rs 2,563.63 crore, of projects to be executed over the financial years 2023 to 2025.