The initial public offering of Paras Defence and Space Technologies continues to see strong demand, with issue being subscribed 40.57 times on September 22, the second day of bidding.
Investors have put in bids for 28.96 crore equity shares against an IPO size of 71.40 lakh shares, subscription data available on the exchanges showed.
Paras Defence IPO is the 42nd initial public offering launched in 2021, which has seen companies rushing to list on bourses to make the most of the ample liquidity. The price band for the offer, which closes on September 23, has been fixed at Rs 165-175 per equity share.
The portion set aside for retail investors has been subscribed 68.57 times and that of non-institutional investors 26.32 times. Qualified institutional investors have put in bids 1.67 times of their reserved portion.
The public issue was subscribed 16.57 times on September 21 as retail portion was booked 31.36 times, garnering bids for more than Rs 2,000 crore worth of shares.
The private sector defence and space engineering products and solutions company aims to raise Rs 170.77 crore through the IPO, which comprises a fresh issue of Rs 140.6 crore and an offer for sale of Rs 30.2 crore by selling shareholders.
The company will utilise net proceeds from the offer to purchase equipment, meet working capital requirements, repay borrowings, and for general corporate purposes.
Also read: Paras Defence IPO: 10 things to know before deciding to subscribe
Paras Defence & Space Technologies is engaged in designing, developing, manufacturing and testing of a wide range of defence and space engineering products and solutions.
"The company is bringing the issue at price band of Rs 165-175 per share at price-to-earnings (P/E multiple of 34x on FY21 PAT basis. The company has a wide range of products and solutions for both defence and space applications. The company, being one of the few players in high precision optics manufacturing for space and defence application in India, has strong R&D capabilities with focus on innovation & is well positioned to benefit from the fovernment's "Atmanirbhar Bharat" and "Make in India" initiatives," said Hem Securities.
"Also company's strong order book gives good revenue visibility going forward. Hence, looking after all, we recommend “subscribe” on issue for listing gain as well as long term," the brokerage added.
In the grey market, the Paras Defence share was trading at Rs 365-375 per share, a premium of Rs 190-200 or 108.6-114.3 percent over the upper price band of Rs 175, the IPO Watch and IPO Central data showed.
The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and listing on bourses.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.