Unmanned aircraft systems (UAS) maker Ideaforge Technology had a bumper listing on July 7 as the stock opened with a massive 94 percent premium, the highest among companies listed so far in 2023.
The share started trade at Rs 1,300 on the National Stock Exchange (NSE) against the issue price of Rs 672, while the opening price on the BSE was Rs 1,305.10.
The listing price matched analysts' expectations. They were expecting a listing premium in the range of 50-75 percent, citing the robust subscription to the initial public offering, first-mover advantage, healthy defence industry outlook and strong products portfolio with 50 percent market share in the domestic drone industry. The trading premium in the grey market was around 75 percent.
The healthy equity market conditions also boosted confidence among participants. The BSE Sensex and Nifty have rallied 15 percent and 16 percent, respectively, since March lows and are at fresh record highs.
The public issue by Ideaforge was subscribed 106.6 times with qualified institutional investors buying 125.81 times the allotted quota, retail investors 85.20 times and high net-worth individuals 80.58 times the portions set aside for them during June 26-30.
Also Read: ESOP payouts hit Ideaforge margins, CFO hopes to cut down such expenses
Prashanth Tapse, research analyst at Mehta Equities, who had predicted a strong listing gain, believes the Ideaforge offer was a great opportunity for investors to take part in one of the pioneers in and the market leader in the Indian UAS or drone market and first-mover advantage driving the growth through a self-propagating flywheel.
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The drone manufacturing company mopped up Rs 567 crore via the IPO including fresh issue of Rs 240 crore. The offer for sale portion was more than Rs 320 crore.
The price band for the offer was Rs 638-672 per share.
The company manufactures unmanned aircraft vehicles for mapping, security and surveillance. These drones are capable of a wide range of mining area planning and mapping applications. It also helps companies in the construction and real estate sector boost their operations, and assist defence forces, too, in conducting intelligence, surveillance and reconnaissance or ISR operations along borders.
As of May 2023, Ideaforge served 265 customers including some central armed police forces, state police departments, disaster management forces, forest departments and private contractors in connection with the Smart cities project. It had an order book of Rs 192.3 crore as of March 2023.
Also Read: Ideaforge IPO: Are you looking at a long-term compounder?
Ideaforge is backed by investors including Infosys, Qualcomm Asia Pacific, Celesta Capital II Mauritius, Celesta Capital II-B Mauritius, Florintree Enterprise LLP, Export-Import Bank of India and Infina Finance.
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