ideaForge IPO: Issue Receives Stellar Response, Subscribed 106X

SUMMARY

ideaForge has become the first stock since the beginning of 2022 to achieve a 100X subscription mark on the BSE and the NSE

The QIB portion was subscribed 125X, while the shares reserved for retail investors were subscribed 85.X

The drone startup plans to raise INR 567 Cr from the public markets through the IPO, which has an OFS component of 48.7 Lakh shares

Building on the strong pent-up demand for IPOs, drone manufacturer ideaForge’s public issue was subscribed 106X at the end of day four.

With this, the IPO, which opened on June 26, came to a close on Friday (June 30). The IPO was slated to conclude on June 29 but was extended by a day due to Eid al-Adha.

Meanwhile, IdeaForge has become the first company since the beginning of 2022 to achieve a 100X subscription mark on the BSE and the NSE for its IPO. However, its rival DroneAcharya’s public issue was subscribed 243.70X, although that was only for listing on the BSE SME platform, in December last year.

ideaForge’s public issue saw high demand from qualified institutional buyers (QIBs), who placed bids for 31.81 Cr shares as against 25.28 Lakh shares on offer. Overall, the portion reserved for QIBs was subscribed 125X.

While the non-institutional investor (NII) category saw 80X subscription, retail investors also placed bids for 7.18 Cr shares as against 8.42 Lakh shares on offer. The portion reserved for retail investors saw 85.2X subscription, while the employee portion also witnessed 96.65X bids.

The drone startup aims to raise INR 567 Cr from the public issue. The IPO comprises an offer for sale (OFS) component of 48.7 Lakh shares and a fresh issue of shares worth INR 240 Cr.

ideaForge set the price band for the IPO at INR 638-672.

The strong performance of the issue is likely the result of the company’s strong fundamentals. ideaForge reported a net profit of 32 Cr in FY23 as against INR 186 Cr in FY22.

Besides, ideaForge will be one of the first drone companies to list on the bourses, and as such enjoys the first-mover advantage in the space, which is also being actively promoted by the government.

Founded in 2007 by IIT Bombay alumni Ashish Bhat, Ankit Mehta, Rahul Singh, Vipul Joshi, and Amardeep Singh, ideaForge manufactures drones and is backed by marquee names such as Celesta Capital, IndusAge Partners and Motilal Oswal Asset Management Company.

The startup claims to have a 50% market share in the unmanned aircraft systems space at the end of financial year 2021-22 (FY22).

The bumper issue comes at a time when the government has pulled all stops to push the homegrown drone manufacturing ecosystem. Be it banning import of drones or instituting a production linked incentive (PLI) scheme for local manufacturers, the state-backed incentives have spurred the drone industry in the country.