ideaForge IPO: Issue Subscribed 13.3X On Day 2, Retail & NIIs Continue To Drive Demand

SUMMARY

The retail category was subscribed over 36X and the portion reserved for NIIs was subscribed more than 22X at the end of the second day of ideaForge’s IPO opening

ideaForge is aiming to raise INR 567 Cr from its public offering and has set a price band of INR 638-672 per share for the IPO

Analysts are largely positive about the IPO given the long-term growth potential of the drone ecosystem in India

ideaForge’s initial public offering (IPO) offer continued to witness a strong demand from retail and non-institutional investors (NIIs) on day two, leading to a 13.3X oversubscription of shares by the end of the day.

The retail category was subscribed over 36X and the portion reserved for NIIs was subscribed more than 22X at the end of the second day of the IPO.

On the other hand, the employees’ portion also received 26X bids.

At the end of day one, ideaForge’s public issue saw 3.7X subscription, with the retail category subscribed almost 12.5X and the portion reserved for NIIs getting 5.13X subscription.

Meanwhile, the qualified institutional buyers’ (QIBs) portion was subscribed a little over 1.3X at the end of second day. On day one, QIBs placed bids for 34,760 shares as against 25,28,596 shares on offer.

IdeaForge is aiming to raise INR 567 Cr from its public offering. It has set a price band of INR 638-672 per share for the IPO.

The IPO comprises an offer for sale (OFS) component of 48.7 Lakh shares and a fresh issue of INR 240 Cr shares.

Analysts are largely positive about the IPO given the long-term growth potential of the drone ecosystem in India.

Commenting on the public issue, Yash Kukreja, research analyst at Mehta Equities, said ideaForge IPO is an opportunity to invest in “one of the first pioneer and pre-eminent market leaders in the Indian Unmanned Aircraft Systems (UAS) drone market”.

“Its leadership position and first-mover advantage drive growth through a self-propagating flywheel… The promoters are technocrats with deep understanding and involvement in the drone industry, coupled with their cumulative work experience of more than eight decades, further strengthen ideaForge’s strategic planning, operations, and design capabilities,” said Kukreja.

However, he said that the issue seems a bit expensive in the absence of any comparable listed peers.

“Based on the industry fancy, demand and growth in the recent performance, the issue fetches the first mover listing advantage in the segment, hence we recommend investors may consider subscribing the issue for listing gain only,” Kukreja added.

Motilal Oswal also has a ‘subscribe’ rating on the issue.

The market is bullish despite ideaForge reporting a decline in its profit after tax (PAT) and order book in FY23. While PAT declined 27.3% year-on-year (YoY) to INR 32 Cr, its order book fell over 38% to INR 192.3 Cr.