ideaForge Technology's IPO subscribed 3.69 times on Day 1

Mumbai-based Drone maker ideaForge Technology is the pioneer and the pre-eminent market leader in the Indian unmanned aircraft systems ("UAS") market, with a market share of approximately 50% in fiscal 2022, has received bids of 1,71,52,080 shares against the offered 46,48,870 equity shares, at a price band of ₹638-672, according to the data available on the stock exchanges.

The issue received strong interest from all the category of investors, to an overall subscription to 3.69 times on the first day of bidding.

Retail Portion was the most subscribed with a subscription of 12.48 times, followed by Employee Portion with a subscription of 8.47 times, Non-Institutional Investors Portion was subscribed 5.13 times, whereas, Qualified Institutional Buyer Portion was subscribed 0.01 times. The issue kicked off for subscription on Monday, June 26, and will close on Thursday, June 29, 2023.

A day prior to the Issue opening, ideaForge Technology Ltd had raised Rs 255 crore from anchor investors. Foreign Investors and Domestic Institutions that participated in the anchor included PineBridge Global Funds, Nomura Funds Ireland Public Ltd, Tata AIG General Insurance Company, Ashoka India Equity, ICICI Prudential Retirement Fund, HSBC Large & Mid Cap Fund, HSBC Infrastructure Fund, Axis Mutual Fund, Mirae Asset Focused Fund, Bandhan Large Cap Fund, HDFC Mutal Fund, Nippon Life India, Aditya Birla Sun Life, Kotak Mutal Fund, and Goldman Sachs.

Broking houses like Motilal Oswal, SBICAP Securities, Hem Securities, Hensex Securities, BP Equities, Choice Equity, Arihant Capital, Swastika Investmart, GEPL Capital, INDSEC Securities and Marwadi Financial Services have given a "SUBSCRIBE" rating to the issue.

The said brokerages unanimously recommend subscribing to the IPO of ideaForge Technology Limited for both short-term listing gains and long-term investment prospects. ideaForge is a pioneer and pre-eminent market leader in the Indian unmanned aircraft systems (UAS) market, commanding a substantial market share of around 50% in Fiscal 2022. With applications in surveillance, mapping, and surveying, ideaForge has ranked 7th globally among dual-use drone manufacturers. Its impressive revenue growth, with a CAGR of 237.48% over the past three fiscal years, coupled with a strong return on capital employed (ROCE) in Fiscal 2022, further adds to its appeal.

The IPO valuation is considered fair, given ideaForge's diverse product portfolio, robust client relationships, and high entry barriers. The government's focus on the defense sector and rising enterprise demand are expected to benefit ideaForge. Moreover, the ban on drone imports and the projected growth of the Indian drone industry present substantial opportunities. Subscribing to the IPO is recommended by the brokerages due to contracted order book value and a significant share of revenues derived from the Indian defense forces. While risks such as dependence on government-aided projects and emerging competition exist, ideaForge's market dominance, revenue growth, and potential government support make it an attractive proposition for investors.

JM Financial Limited and IIFL Securities Limited are the sole book running lead manager while Link Intime India Private Limited is the registrar to the offer.

Source : Equity Bulls

Keywords

ideaForgeTechnology IPO FundRaising Subscription Day1