The Rs 3,066.89-crore Dhoot Transmission IPO entered its second day of bidding on Tuesday, August 11, with investors showing decent interest. The issue is already commanding a 30% premium in the grey market over its upper issue price, pointing to the possibility of a strong listing gain.Market analysts have also maintained a positive outlook on the IPO, indicating that investors may consider subscribing to the issue.On the first day of bidding, the IPO was subscribed 63% overall, with 2.49 crore shares on offer. The retail portion saw stronger demand, getting subscribed 74% against the 1.25 crore shares reserved for retail investors.The IPO comprises a fresh issue of 1.61 crore equity shares worth Rs 1,400 crore, along with an Offer for Sale (OFS) of 1.91 crore shares aggregating Rs 1,666.89 crore. Under the OFS, BC Asia Investments XV Ltd. will offload shares worth nearly Rs 1,395 crore, while Mangalam Capital Pvt. Ltd. will sell shares valued at around Rs 272 crore.The company has fixed the IPO price band at Rs 829-Rs 871 per share.At the upper end of the price band, the IPO comes with a lot size of 17 shares, meaning retail investors will need to invest a minimum of Rs 14,807 to bid for one lot.The public issue will remain open for subscription from August 10 to August 12, 2026. The basis of allotment is expected to be finalised on August 13, while the shares are tentatively scheduled to list on the NSE and BSE on August 17, 2026.Axis Capital Ltd. is the book-running lead manager to the issue, while Kfin Technologies Ltd. has been appointed as the registrar.Dhoot Transmission IPO Subscription DetailsThe Dhoot Transmission IPO received a decent response from investors on Day 1, with the issue subscribed 63% overall against the 2.49 crore shares on offer.The Retail Individual Investors (RIIs) category was subscribed 74%, with 1.25 crore shares available for subscription.The Non-Institutional Investors (NIIs) segment saw stronger demand, with the portion subscribed 1.09 times against 53.92 lakh shares on offer.Meanwhile, the Qualified Institutional Buyers (QIBs) category was subscribed 6%, compared with the 68.99 lakh shares reserved for the segment.Dhoot Transmission IPO GMP TodayThe Dhoot Transmission IPO GMP is currently around Rs 259 in the grey market, indicating a potential 30% premium over the upper end of the IPO price band.Based on the current GMP, the stock could potentially list at around Rs 1,130 per share, compared with the IPO's upper price of Rs 871.However, investors should keep in mind that the grey market premium is an unofficial indicator and can change significantly ahead of listing. GMP should not be viewed as a guarantee of the stock's actual listing price or post-listing performance.Anchor InvestorsOn August 7, 2026, Dhoot Transmission raised Rs 918.27 crore from 72 anchor investors ahead of its initial public offering, allotting 1,05,42,657 equity shares at Rs 871 apiece, the upper end of the IPO price band. Each equity share has a face value of Rs 2, with the remaining Rs 869 representing the share premium.Where Will the IPO Proceeds Be Used?The company plans to utilise the IPO proceeds to strengthen its balance sheet and fund future growth initiatives.A significant portion of the net proceeds, around Rs 464.80 crore, will be used to repay or prepay certain outstanding borrowings. Additionally, nearly Rs 301.77 crore will be infused into subsidiaries, including Dhoot Autocomponents Private Limited, Dhoot Electricals Systems Private Limited, Dhoot Automotive Systems Private Limited, and Dhoot Transmission UK Limited, enabling them to reduce their debt.The company has also earmarked Rs 150 crore to establish new wiring harness manufacturing facilities at Jhajjar, Haryana, and Shoolagiri, Hosur, Tamil Nadu, enhancing production capacity to meet rising demand. The remaining funds will support inorganic growth opportunities through acquisitions and be used for general corporate purposes.About Dhoot TransmissionFounded in April 1998, Dhoot Transmission Ltd. is one of India's leading electrical and electronics (E&E) companies specializing in the design, engineering, manufacturing, and supply of wiring harnesses and electrical distribution systems for automotive and industrial applications.Its diversified product portfolio includes wiring harnesses, battery packs, sensors, electronic controllers, automotive switches, terminals, connectors, and power supply cords, serving both internal combustion engine (ICE) and electric vehicle (EV) platforms.The company ranks among the top two players in India's two-wheeler and three-wheeler wiring harness market with a 41% market share. It also dominates the electric two-wheeler and three-wheeler segment, commanding nearly 70% market share in FY26.Beyond automotive applications, Dhoot Transmission supplies products for commercial vehicles, off-highway vehicles, agricultural equipment, and industrial applications. Notably, around 95% of its automotive product portfolio is either EV-focused or powertrain-neutral, positioning the company to benefit from long-term trends such as vehicle electrification, premiumisation, connected mobility, and automation.The company has built long-standing relationships with leading automotive OEMs and has developed a diversified customer base backed by consistent operational performance. As of March 31, 2026, Dhoot Transmission employed 2,735 full-time employees across manufacturing, research & development, engineering, sales, finance, and corporate functions.Financial PerformanceDhoot Transmission reported a robust financial performance in FY26, driven by strong revenue growth and steady profitability.The company's total income increased 31% to Rs 4,563.70 crore in FY26 from Rs 3,472.24 crore in FY25. Meanwhile, Profit After Tax (PAT) rose 12% to Rs 396.84 crore, compared with Rs 353.89 crore in the previous financial year, reflecting sustained business momentum and healthy earnings growth.AnandRathi research has assigned a "Subscribe for Long Term" rating to the Dhoot Transmission IPO. According to the brokerage, based on annualised FY26 earnings, the company is seeking a P/E multiple of 44.9x, with a post-issue market capitalisation of approximately Rs 1,78,161 million. While the valuation appears fairly priced, the brokerage highlighted high customer concentration and execution risks related to expansion projects as key concerns.Nevertheless, AnandRathi believes Dhoot Transmission's market leadership, established OEM relationships, expanding manufacturing capacity and increasing exposure to EV components provide a favourable foundation for long-term growth.Ventura Securities has also recommended investors "Subscribe" to the issue. The brokerage highlighted Dhoot Transmission's strong FY26 performance, rising EV contribution and strategic focus on premiumisation and electrification.According to Ventura, the company is aiming to increase the content value per vehicle by expanding into areas such as battery packs and advanced driver assistance systems (ADAS) while benefiting from increasingly stringent global emission standards. The brokerage also highlighted the company's marquee customer base and diversified business mix as key strengths. Under Managing Director Rahul Radhavallabh Dhoot, who has more than 27 years of industry experience, the company is looking to strengthen its position in automotive E&E solutions and expand its growth opportunities.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)