ideaForge IPO: Issue Subscribed 3.7X On Day 1 On Strong Demand From Retail Investors, NIIs

SUMMARY

While the retail category was subscribed almost 12.5X, the portion reserved for NIIs was subscribed 5.13X

ideaForge has set a price band of INR 638-672 per share for the IPO, which comprises an offer for sale component of 48.7 Lakh shares and a fresh issue of INR 240 Cr shares

ideaForge is a safer bet for investors looking for short-term gains, but only aggressive investors should consider holding the stock for long term: Swastika Investmart’s Anubhuti Mishra

Drone startup IdeaForge saw strong demand on the opening day of its initial public offering (IPO), with the public issue seeing 3.7X subscription.

Retail investors led the show, followed by non-institutional investors (NIIs). While the retail category was subscribed almost 12.5X, the portion reserved for NIIs was subscribed 5.13X.

Meanwhile, the portion reserved for employees was also oversubscribed, seeing bids for 8.5X shares.

The issue was oversubscribed within a few hours of its opening. While qualified institutional buyers (QIBs) didn’t show much interest in the early hours, they placed bids for 34,760 shares by the end of the day as against 25,28,596 shares reserved for them.

On the other hand, 12,64,297 shares are reserved for NIIs and 8,42,865 for retail investors.

The drone startup has set a price band of INR 638-672 per share for the IPO and is looking to raise INR 567 Cr from the offering. ideaForge’s IPO comprises an offer for sale (OFS) component of 48.7 Lakh shares and a fresh issue of INR 240 Cr shares.

Commenting on the IPO, Anubhuti Mishra, equity research analyst at Swastika Investmart, said ideaForge is well-positioned to benefit from the growing demand for drones in India, but the company faces some challenges, including competition from international players and regulatory uncertainty.

While it has the potential for significant listing gains, investors should carefully consider their risk tolerance before investing in the company, Mishra added.

She believes ideaForge is a safer bet for investors looking for short-term gains. “Only aggressive investors should consider holding ideaForge for the long term due to its inherent risk factors,” Mishra added.

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

“We believe IFL could benefit from government impetus on the defence space as well as rising enterprise demand,” the brokerage said.

Founded in 2007 by IIT Bombay graduates Ashish Bhat, Ankit Mehta, Rahul Singh, Vipul Joshi, and Amardeep Singh, ideaForge is one of the oldest drone manufacturers in the country. Its competitor DroneAcharya also got listed at a 90% premium on the BSE SME platform in December last year and is currently trading 80% above the listing price.