Mumbai, June 26, 2023 – The initial public offering (IPO) of ideaForge, India’s leading drone manufacturer, opened for subscription on Monday, June 26, garnering significant attention from investors. The IPO, valued at ₹567 crore, witnessed a strong response, with the issue being oversubscribed by 1.21 times on the first day of bidding.
According to data from the Bombay Stock Exchange (BSE), ideaForge received bids for 56,29,470 shares against the 46,48,870 shares on offer. Retail investors showed substantial interest, as the portion reserved for them was oversubscribed by 4.81 times. Employees also displayed enthusiasm, with the employee quota being subscribed 3.46 times. However, no bids from qualified institutional buyers (QIB) have been reported thus far. The non-institutional investors’ (NII) quota was subscribed 1.21 times.
The grey market premium (GMP) for ideaForge’s shares experienced a significant surge on the first day, reaching ₹490. This surge indicates strong demand and positive market sentiment surrounding the IPO. It’s important to note that the grey market premium is a reflection of the company’s shares’ performance in the unlisted market and is subject to rapid fluctuations.
The IPO comprises a fresh issue of equity shares worth ₹240 crore and an offer for sale (OFS) of up to 48.6 lakh shares by selling shareholders. The fresh issue portion was reduced from ₹300 crore after ideaForge raised ₹60 crore through a pre-IPO placement round by offloading 8.92 lakh shares to institutional investors.
The subscription period for the IPO will conclude on June 29, with the date of allotment expected to be July 4. ideaForge plans to list its shares on the stock exchanges on July 7.
ideaForge successfully raised ₹254 crore in the anchor round, attracting participation from prominent investors such as Nomura, Invesco, HSBC, ICICI Pru MF, Mirae Asset MF, HDFC MF, and Goldman Sachs.
The proceeds from the IPO will be utilized for various purposes, including debt repayment, working capital funding, product development, and general corporate requirements. The company aims to raise ₹50 crore for debt repayment, ₹135 crore for working capital, and ₹40 crore for product development.
Market experts have shared their recommendations regarding the IPO. Motilal Oswal recommends subscribing to the issue, highlighting ideaForge’s diverse product portfolio, niche market presence, strong client relationships, and high entry barriers. They believe the company stands to benefit from government initiatives in the defense sector and increasing enterprise demand. Marwari Financial Services also suggests subscribing to the IPO, citing ideaForge’s market-leading position, first-mover advantage, and reasonable valuation. While Axis Capital has not rated the issue, they acknowledge ideaForge’s market leadership in the Indian unmanned aerial systems (UAS) market.
As the IPO progresses, market observers will closely monitor the demand and subsequent listing performance of ideaForge, a prominent player in the Indian drone industry.
The Dani Post Disclaimer: This article provides information and should not be considered as financial advice. Investors should conduct their own research and consult with their financial advisors before making any investment decisions.
