Divgi TorqTransfer Systems IPO

Divgi TorqTransfer Systems Limited is an auto ancillary company having the capability to develop and provide system level transfer case, torque coupler and DCT solutions.

The company is one of the leading players supplying transfer case systems to automotive OEMs in India, and also the largest supplier of transfer case systems to passenger vehicle manufacturers in India. Divgi TorqTransfer Systems is the only Indian company that manufactures and exports transfer cases to global OEMs as well as producer of torque couplers. Further, the company develops transmission systems for EVs, DCT systems, and rear wheel drive manual transmissions.

The company manufactures and supplies a variety of products under the broad categories as follows: torque transfer systems which includes four wheel-drive (“4WD”) and all-wheel-drive (“AWD”) products; synchronizer systems for manual transmissions and DCT; components for the above-mentioned product categories for torque transfer systems and synchronizer systems in manual transmission, DCT, and EVs.

The company in its red herring prospectus said that it gets a significant portion of their revenue from its top five clients — Mahindra & Mahindra, Tata Motors, Toyota Kirloskar Auto Parts, BorgWarner and a Russian automobile manufacturer.

India is the biggest market for the company contributing 91.61% of the total revenue during the period April-September 2022, followed by the US [3.82%], and China [4.54%].

Divgi TorqTransfer has three manufacturing and assembling facilities across India located at Sirsi in Karnataka, and Shivare and Bhosari near Pune in Maharashtra. It has also purchased 10 acres of land at Shirwal near Pune in Maharashtra and commenced construction which will help them to expand their manufacturing capacity including for manufacture of DCT and EV transmissions. As on February 3, 2023, the construction of this facility at Shirwal is 80% completed, and is expected to be fully completed by fiscal 2024.