The maiden public issue of Ideaforge Technology saw a robust demand among investors as the Rs 567-crore offer received bids for 49.3 crore equity shares against the IPO size of 0.46 crore shares. The offer was subscribed 106.06 times on June 30, the final day of bidding.
The Securities and Exchange Board of India (Sebi) extended the subscription period by a day to June 30 as the market was closed on June 29. The issue opened on June 26.
Retail investors, who have 10 percent reservation in the issue size, have bought 85.20 times the portion set aside for them, while employees have bid 96.65 times the allotted quota of share.
A total of 13,112 equity shares are being reserved for company's employees who will get the said shares at a discount of Rs 32 per share to the final issue price.
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A part set aside for high networth individuals in the IPO was booked 80.58 times and that of qualified institutional buyers was subscribed 125.81 times.
Up to 75 percent of the IPO size is reserved for qualified institutional buyers and the 15 percent for high networth individuals (non-institutional investors).
In previous three days, the issue was subscribed 50.3 times.
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The offering comprised a fresh issuance of shares worth Rs 240 crore, and an offer for sale of 48.69 lakh shares by selling shareholders. Promoters and investors will get the offer for sale money, while the company will receive fresh issue money by the company. The repaying debts, working capital requirements, and investment in product development are the key objectives behind fresh issue.
The price band for the offer is Rs 638-672 per share.
The company manufactures unmanned aircraft vehicles for mapping, security & surveillance. These drones are capable of a wide range of mining area planning, and mapping applications.
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"The company is pioneer and the pre-eminent market leader in the Indian UAS industry, with first-mover advantage and strong relationships with a diverse customer base. Also, it is available at reasonable valuation considering the future growth potential of the company," said Marwadi Financial Services which has assigned subscribe rating.
IdeaForge, with a 50 percent market share in the Indian unmanned aircraft systems (UAS) market, has experienced a remarkable revenue growth in the past supported by a favourable business environment, increased orders, and government initiatives like the PLI scheme for drones.
However, there are risks which need to be considered. "IdeaForge heavily relies on government-aided projects, which poses a significant risk due to its dependence on a single source of revenue. The entry of other major players into the market, such as the Adani Group, through joint ventures with foreign drone companies, adds further competition," Swastika Investmart said.
Also read: Ideaforge IPO: 10 key things to know before you buy
Moreover, IdeaForge's lack of long-term contracts and reliance on established relationships for securing deals is a potential vulnerability, the brokerage feels.
There is no apple-to-apple comparison in the listed space. Considering both the opportunities and risks, IdeaForge has been assigned a subscription rating for aggressive investors, Swastika Investmart said.
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