Dhoot Transmission IPO Review: Can Its 70% EV Market Share Drive Future Growth?

Dhoot Transmission makes the wiring harnesses, sensors, switches, controllers, and battery packs that help modern vehicles communicate and function. It is now coming to the market with an IPO of up to ₹3,067 crore, including a fresh issue of ₹1,400 crore and an OFS of ₹1,667 crore. At the upper price of ₹871, the company is seeking a market capitalisation of about ₹17,816 crore.

What makes Dhoot Transmission IPO interesting is the combination of leadership in EV wiring harnesses, strong revenue growth and a cash-rich balance sheet, while the valuation remains broadly in line with listed peers. But there is an important counterpoint: more than 80% of revenue comes from its top 10 customers, and margins have weakened as input costs increased.

So, is Dhoot Transmission's business quality strong enough to justify the price investors are being asked to pay? Let’s understand.

Dhoot Transmission IPO Snapshot

Dhoot Transmission IPO GMP

The Grey Market Premium (GMP) is an unofficial indicator based on market demand and can change rapidly. It does not guarantee listing gains or reflect the intrinsic value of an IPO. Investment decisions should be based on the company's fundamentals, valuation, financial performance, and risks rather than GMP alone. Read our detailed guide on IPO GMP to understand how it works and its limitations.

Dhoot Transmission: The Business Behind the Wires

Think of a vehicle's wiring harness as its nervous system. Just as nerves carry signals around the human body, wiring harnesses carry electrical power and signals between different parts of a vehicle.

Dhoot Transmission manufactures these wiring harnesses along with automotive switches, sensors, controllers and battery packs. Its customers include vehicle manufacturers such as Bajaj Auto, TVS Motor, Honda Motorcycle and Royal Enfield.

The company primarily makes money by supplying these components directly to vehicle manufacturers. Its biggest business is wiring harnesses, which generated ₹3,487.72 crore in FY26, or about 77% of total revenue. That makes wiring harnesses both its biggest strength and an important concentration risk.

Dhoot operates through 22 manufacturing plants across India, the UK, Thailand and Slovakia. It does more than simply manufacture components. It works with customers on product design, prototypes and manufacturing, and often builds factories close to customer plants. This can reduce delivery time and logistics costs.

There is another useful feature in its business model. Dhoot makes several important inputs, including terminals, connectors and cables, internally. This is called backward integration, which simply means making more of the important parts yourself instead of buying everything from outside suppliers.

For customers, switching suppliers is also not always easy because Dhoot develops customised tools and components for specific vehicle models. In practical terms, once a supplier becomes part of a vehicle's design and production process, replacing it can require time, testing and additional cost.

How Big Is Dhoot Transmission’s Growth Opportunity?

The bigger opportunity comes from the transformation of India's two-wheeler and three-wheeler market.

The domestic two-wheeler market is expected to grow from 22.1 million units in FY26 to around 30-35 million units by FY31, implying an estimated 8-10% CAGR. More importantly for Dhoot, EV penetration is projected to increase from 6.6% to 25-30% over the same period.

Why does that matter to a wiring harness manufacturer?

An EV has a more complex electrical system than a conventional petrol vehicle. As a result, an EV wiring harness can be worth around 1.5x to 2.5x more than one used in an internal-combustion vehicle. The domestic 2W EV wiring harness market is therefore expected to grow much faster, at around 39-41% CAGR, potentially reaching ₹3,500-3,700 crore by FY31.

Government initiatives such as PM eDrive and policies encouraging local manufacturing could support this transition.

But industry growth does not automatically translate into company growth. Dhoot needs to win orders and maintain its position against competitors.

Here, its starting position is important. The company has a 41.03% value-based share of India's combined two-wheeler and three-wheeler wiring harness market and nearly 70% share in the EV segment. Around 95% of its product portfolio is either EV-focused or powertrain-neutral, meaning it can be used in both EVs and conventional vehicles.

The biggest insight is this: Dhoot is not merely betting on EV adoption. It already has a strong position in a component whose value increases as vehicles become more electrically complex.

What Makes Dhoot Transmission Strong?

The first major strength is market position. A 41.03% share in 2W and 3W wiring harnesses and nearly 70% in EV wiring harnesses give Dhoot meaningful scale and customer relationships. This matters because vehicle manufacturers usually need reliable component suppliers that can consistently meet quality, timing and production requirements. Its relationships with major manufacturers strengthen that position. For investors, the important point is that Dhoot enters the EV growth cycle from a position of strength rather than starting from scratch.

The second strength is operating efficiency and product integration. Dhoot manufactures several important components internally, while also providing design-to-production solutions. This can improve cost control and quality management. In FY26, its adjusted EBITDA margin was 15.71%, above Minda Corporation's 11.66% and Motherson Sumi Wiring India's 9.24%. Its FY26 revenue also grew 31.35% to ₹4,524.96 crore. Together, these numbers suggest that the company has been able to grow while maintaining stronger operating profitability than several comparable businesses.

The third strength is its financial flexibility and exposure to EV growth. Dhoot had ₹1,084.28 crore of cash and cash equivalents in FY26, more than its borrowings and lease liabilities, resulting in negative net debt of ₹177.56 crore. It also generated ₹1,093.56 crore from EV-related products, or about 24% of revenue. This combination gives it financial room to invest while giving investors exposure to a rapidly changing part of the automotive market.

What Are The Real Risks?

The biggest risk is customer concentration. The top 10 customers contributed 80.93% of FY26 revenue, while Bajaj Auto alone contributed 31.84%, or ₹1,440.83 crore. This means losing a major customer, facing lower orders, or experiencing production issues at a key customer could have a meaningful impact on Dhoot's revenue. Strong customer relationships reduce this risk, but they do not eliminate it.

The second risk is dependence on the two-wheeler market and wiring harnesses. About 65.47% of revenue came from the Indian two-wheeler segment, while wiring harnesses contributed 77.08% of total revenue. This creates a clear concentration on both a customer industry and a core product. A slowdown in two-wheeler demand, regulatory disruption, or technological changes could therefore affect the business. EV growth helps, but it does not completely remove this dependence.

The third concern is cash tied up in the business and rising costs. Net working capital increased from 12 days to 102 days, meaning significantly more cash was locked in inventory and receivables. At the same time, raw materials accounted for 76.20% of total expenses, making profitability sensitive to commodity prices, particularly copper. This pressure is already visible: adjusted EBITDA margin declined from 18.31% to 15.71% between FY24 and FY26. The business is growing quickly, but investors should watch whether profitability stabilises as it expands.

Is Dhoot Transmission Priced Fairly Against Its Peers?

At ₹871 per share, Dhoot Transmission is valued at about 44.89x post-IPO earnings and a market capitalisation of approximately ₹17,816 crore.

On a P/E basis, the valuation is below Uno Minda at 56.87x and Sona BLW at 74.64x, while broadly close to Minda Corporation at 46.49x and Motherson Sumi Wiring India at 43.24x.

That looks reasonable at first glance. But P/E only compares market value with profit. It does not fully account for the company's cash and debt position.

A better cross-check here is EV/EBITDA. After adjusting for Dhoot's cash position, its enterprise value is approximately ₹17,638 crore. Against FY26 EBITDA of ₹710.99 crore, this translates into an EV/EBITDA multiple of about 24.81x.

The valuation becomes more interesting when profitability is considered. Dhoot's 15.71% EBITDA margin is higher than Minda Corporation, Uno Minda and Motherson Sumi Wiring India. Sona BLW has a higher margin, but also trades at a substantially higher P/E.

Dhoot is also smaller than Minda Corporation in revenue, yet reported a higher FY26 profit of ₹396.84 crore versus Minda's ₹358.22 crore. This suggests its stronger margins are meaningful rather than simply a result of having a larger scale.

One caution is necessary around ROCE. The FY26 ROCE is at 19.14%, but it excludes the ₹1,022.56 crore of unused cash raised through the March 2026 share issue; adjusted ROCE rises to 27.83%. The adjusted figure is more useful for judging operating efficiency because idle cash was not yet being used in the business.

Overall, the IPO does not appear to demand a clear premium over the sector despite Dhoot's stronger margins and cash-rich balance sheet. That supports the valuation case, although a 44.89x P/E still means investors are paying for continued growth.

Author's Take: Should You Consider This IPO?

Dhoot Transmission presents a fairly balanced investment case. On the positive side, it has a strong position in wiring harnesses, leadership in the EV segment, healthy revenue growth, better-than-several-peer operating margins, and a balance sheet with more cash than debt. Its exposure to EVs is particularly relevant because higher electrical complexity can increase the value of wiring harnesses per vehicle.

The concerns are equally real. Customer concentration is high, the business remains heavily dependent on two-wheelers and wiring harnesses, raw materials account for a large share of costs, and working capital has expanded sharply. Margins have also declined despite strong revenue growth.

At around 44.89x earnings, the IPO is not cheap in absolute terms. However, its valuation is broadly aligned with listed peers, while its operating margin and balance sheet compare favourably with several of them. The key question for investors is therefore not whether Dhoot is a high-growth company today, but whether it can maintain its market position and convert the EV opportunity into sustained growth without sacrificing margins and cash flow.

Overall, Dhoot Transmission presents a cautiously positive investment case. Its EV positioning, business quality and financial strength are encouraging, although customer concentration, working capital and margin pressure remain key risks. The valuation looks reasonable, but leaves limited room for weaker-than-expected growth or profitability.

Read the RA disclaimer here.