Mumbai, August 10: Dhoot Transmission Limited’s IPO opened for investors on Monday. Before applying, investors should understand the associated risks, which include a significant revenue concentration from the top five customers, cybersecurity threats, and related party transactions.
According to the company’s Red Herring Prospectus (RHP), 71.56% of its total operational income for the fiscal year 2026 came from its top five customers. This figure was 71.18% in fiscal year 2025 and 66.17% in fiscal year 2024, indicating that a substantial portion of the company’s revenue relies on a limited number of clients.
Notably, Dhoot Transmission does not have long-term supply contracts with these companies and supplies according to the needs of Original Equipment Manufacturers (OEMs). The RHP states that clients have the right to terminate these contracts, which could adversely affect the company’s business.
Additionally, Dhoot Transmission reported a cybersecurity incident in fiscal year 2025, resulting in a significant data leak, including confidential information related to product designs and pricing. While management has taken steps to enhance security through additional investments, they cannot guarantee that future incidents will be completely prevented.
The company also flagged related party transactions as a major risk in its RHP. These transactions involve sales of products, rental agreements, commissions, acquisition of fixed assets, and expense recoveries.
During fiscal year 2024, shareholders approved related party transactions involving the sale of approximately ₹57.42 crore in current assets and about ₹23.75 crore in fixed assets (land and buildings) to its subsidiary, Dhoot Auto-Components Private Limited. Furthermore, the board has periodically approved higher limits for annual transactions with key partner companies to support group supply and logistics.
Dhoot Transmission emphasized that they cannot assure shareholders that the terms of these transactions will always be favorable to the company.
The IPO is open for retail investors from August 10 to 12, with a price band set between ₹829 and ₹871 per share. The lot size is 17 shares, and the listing on BSE and NSE is expected on August 17.
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