ideaForge IPO Fully Subscribed In Early Hours On Opening Day

SUMMARY

The retail category got subscribed by 5.9X and the NII portion was subscribed by 1.6X by 1:30 PM

ideaForge filed its red herring prospectus (RHP) with the Securities and Exchange Board of India (SEBI) last week and set a price band of INR 638-672 per share for its IPO

ideaForge is looking to raise INR 567 Cr from the IPO

Drone startup ideaForge’s IPO got fully subscribed on the opening day. At 1:30 PM IST on Monday (June 26), the public issue was subscribed 1.5X, with the retail investor portion leading the way.

While the retail category got subscribed 5.9X, the non-institutional investors (NII) portion was subscribed 1.6X. Besides, the employees’ portion also received 4.1X bids. Qualified Institutional Buyers (QIBs) have not subscribed for the shares so far.

ideaForge filed its red herring prospectus (RHP) with the Securities and Exchange Board of India (SEBI)last week and set a price band of INR 638-672 per share for its IPO.

The drone startup’s IPO closes on Thursday (June 29).

ideaForge is looking to raise INR 567 Cr from the IPO. It comprises an offer for sale (OFS) of 48.7 Lakh shares and a fresh issue of INR 240 Cr shares.

As per the exchange filing, the IPO has reserved 12,64,297 shares for NIIs, 25,28,596 for QIBs, and 8,42,865 for retail investors.

Motilal Oswal has assigned a ‘subscribe’ rating to the IPO.

“We like ideaForge Ltd (IFL) given its complex/wide product portfolio, presence in niche space, strong client relationship and high entry barriers,” said the brokerage in a recent research note.

“We believe IFL could benefit from government impetus on the defence space as well as rising enterprise demand. Hence we recommend Subscribe. Further, given the current buoyant market and high interest for defence stocks, the issue could see listing gains as well,” Motilal Oswal said.

The brokerage also noted that ideaForge is a pioneer in drone manufacturing in India with a diversified product portfolio, which enjoys a market share of 50% as of FY22. The startup ranked seventh globally in the dual-use category (civil/ defence) drone manufacturers, as per Drone Industry Insights report, Dec 2022.

As per its RHP, the startup’s profit after tax (PAT) declined 27.3% to INR 32 Cr in FY23 from INR 44 Cr reported in the previous fiscal year due to ESOP expenses. Its operating revenue saw a 16.7% rise to INR 186 Cr in FY23.

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