Retail investors rushed to fully subscribe to the public issue of Aeroflex Industries, a maker of hoses that are used in several industries, in less than an hour of opening for bids.
At close on first day, the issue was subscribed 6.72 times, cumulative data available on BSE showed. It garnered applications for 15.6 crore shares against on offer 2.32 crore shares. The quota reserved for retail investors was subscribed 6.71 times, followed by 14.11 times for non-institutional investors and 3.63 times for shareholder quota. Qualified institutional buyers bought 1.17 times the reserved portion.
With this IPO, the Mumbai-based firm intends to raise Rs 351 crore, at the upper price band. The IPO comprises fresh issuance of shares worth Rs 162 crore, and an offer-for-sale (OFS) of 1.75 crore shares by promoter entity SAT Industries.
Read: IPO Watch — Aeroflex Industries: Can it deliver?
The fresh issue proceeds, excluding offer expenses, will be used to repay certain borrowings amounting to Rs 32 crore, working capital requirements of Rs 84 crore, and the remaining general corporate purposes and acquisitions.
The price band for the book-built issue has been fixed at Rs 102-108 per share. Investors can bid for a minimum of 130 equity shares and in multiples of 130 shares thereafter. Hence, the minimum investment by retail investors would be Rs 14,040 for one lot (130 shares x issue price of Rs 108 per share) and Rs 1,96,560 (14 lots) would be the maximum.
Analysts are mostly upbeat about Aeroflex Industries, which makes and supplies environment friendly metallic flexible flow solution products. The issue opened for subscription on August 22.
Analysts cite its dominant market share in the business, strong clientele, strong research and development team and decent return ratios as key reasons behind their confidence.
Aeroflex has recorded a healthy financial performance in the past years, with revenue from operations posting a CAGR of 36.43 percent in FY21-FY23 to Rs 269.5 crore in the year ended March FY23. Profit recorded a CAGR of 124 percent in the same period to Rs 30.15 crore and EBITDA jumped at a CAGR of 55.54 percent to Rs 54.03 crore. The EBITDA margin expanded to 20.05 percent in FY23, from 19.39 percent in FY22 and it was at 15.43 percent in FY21.
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