On Monday, June 26, subscriptions for ideaForge, the country’s top drone maker, began at Rs 567 crore. The subscription period for the issue, which has a price range of 638-672, will end on June 29.
On Monday, June 26, subscriptions for ideaForge, the country’s top drone maker, began at 567 crores. The issue, with a price range of 638-672, will be closed for subscription on June 29.
Subscription status
The issue had a robust response and was oversubscribed on the first day of bidding. The ideaForge Technology IPO has been subscribed to 1.21 times at 12:45 PM on Day one of bidding. According to BSE statistics, the business has received bids for 56,29,470 shares vs 46,48,870 shares on sale.
The section reserved for retail investors received the most bids. It was subscribed to 4.81 times, while the employee section was subscribed to 3.46 times. Meanwhile, the NII quota has been subscribed 1.21 times, but no qualified institutional buyers (QIB) offer for the issue has been observed thus far.
GMP
On Monday, the company’s shares saw a significant premium of 490 on the grey market, signalling strong interest in the IPO.
However, it should be noted that the grey market premium is merely a measure of how the company’s shares are performing in the unlisted market and can fluctuate rapidly.
About the IPO
The IPO consists of a new issue of up to 240 crore equity shares and an offer for sale (OFS) of up to 48.6 lakh shares by selling stockholders. The new issue component of the offer has been cut from 300 to this present level after the company earned 60 crores in a pre-IPO placement round by selling 8.92 lakh shares to institutional investors.
Important dates
The date of unit allocation is scheduled to be July 4, with the issue slated to list on the bourses on July 7.
Anchor investment
The anchor round raised 254 crores, including participation from notable investors such as Nomura, Invesco, HSBC, ICICI Pru MF, Mirae Asset MF, HDFC MF, and Goldman Sachs.
Reservation
The net offer is divided into three parts: 75 per cent for QIBs, 15 per cent for non-institutional investors, and 10 per cent for regular investors.
Objective
The proceeds from the new issuance would be used to settle some loans obtained by the firm, 135 crores to meet working capital requirements, and 40 crores to invest in product development and general corporate objectives.
What do experts say?
Motilal Oswal: Subscribe
“We like IFL because of its diversified product portfolio, presence in various niche markets, solid connections with customers, and high entry barriers.” The issue is suitably priced at 5x P/BV post-issue (peers average: 8x). We expect that IFL will benefit from government initiatives in the defence sector as well as increased enterprise demand. As a result, we encourage Subscribing. Furthermore, given the present bullish market and high demand for military equities, the issue may enjoy listing gains as well,” MOSL noted.
It was also mentioned that ideaForge has one of the top product portfolios in the market, with a dual presence in civil and defence applications. IFL’s sales increased more than fivefold from FY21 to FY23 to 190 crores, while PAT went positive in the previous two years, with a profit of 32 crores in FY23. Furthermore, given the present bullish market and considerable interest in defence equities, the brokerage believes the issue might enjoy listing gains as well.
Marwari Financial Services: Subscribe
“With a post-issue FY23 Annualised EPS of 7.68, the company will list at a P/E of 87.54x and a market cap of 2,800 crores.” whereas its competitors, MTAR technology, Data patterns, and Astra microwave products, have P/E ratios of 58.52x, 84.95x, and 52.27x, respectively. We rate this IPO as Subscribe because the firm is the pioneer and market leader in the Indian UAS sector, with a first-mover advantage and solid ties with a wide client base. Furthermore, given the company’s future development potential, it is accessible at a reasonable value.”
Axis Capital: Not Rated
While the brokerage did not rate the issue, it has stated that ideaForge is the pioneer and undisputed market leader in the Indian UAS sector, with a market share of almost 50% in fiscal 2022.
“In 2004, their promoters designed and built their first quadrotor drone.” They started operations in 2007, and as a consequence of their first-mover advantage, they were one of the first few companies in India to enter the UAV business. Their in-house design, development, engineering, and manufacturing capabilities have helped them to build better goods based on increasing client requests, ultimately improving customer experience with their products. Their ability to develop a completely integrated system and control the entire stack sets them apart from the competition. They are propelled by a self-propagating flywheel, and as a consequence of their leadership and first-mover advantage, they have been able to build a superior user experience based on consumer feedback and constant technological advances.” It sais.
