Shares of drone maker ideaForge technology on Friday made a bumper debut on the stock exchanges with a 94% premium over the issue price of Rs 672 per share. It listed at Rs 1,300 on the NSE and Rs 1,305.10 on the BSE. During the day, the stock touched a high of Rs 1,343.95 on the NSE and closed at a 93% premium over the issue price at Rs 1,297.
The Rs 567-crore IPO, which opened for subscription on June 26 and closed on June 30, was subscribed 106 times. It included a fresh issue of shares worth Rs 240 crore and an offer for sale of Rs 327 crore by promoters and shareholders.
“ideaForge’s super listing debut can be attributed to its strong products portfolio with a 50% market share in the domestic drone industry, first mover advantage and healthy equity market conditions”, Abhimanyu Bhattacharya, Partner at Khaitan & Company, said.
The category of qualified institutional buyers was subscribed 125.81 times, non-institutional investors 80.5 times and the retail 85.1 times. It had a price band of Rs 638-672 with a lot size of 22.
The company will utilise net proceeds from the fresh issue for repayment or prepayment of debt, fund working capital gap, investment in product development and general corporate purposes.
“After the bumper listing gains of ideaForge, we advise investors to book profits at current levels, while investors with higher risk appetite can hold it. However, no fresh entry is recommended at these levels. The stock may see some profit booking in coming days”, Ravi Singh, vice president and head of research, Share India, said.
According to Manish Chowdhury, head of research at StoxBox, the run-up in the share price on Friday stretched the valuation which was already rich at the time of the IPO issuance. “We, therefore, advise investors to book profit and re-evaluate the business once there is comfort on the valuation front and further clarity on the competitive intensity in the sector.”
ideaForge Technology mopped up Rs 254.88 crore from 31 anchor investors. It allocated 37.92 lakh equity shares to anchor investors at Rs 672 per share, the higher end of the price band. Some of the anchor investors were: Pinebridge Global Funds, Nomura Funds, Ashoka India Equity Investment Trust Plc, HSBC Mutual Fund and Goldman Sachs Funds.
