ideaForge Technology shares doubles investor wealth on debut; time to book profit?

Shares of ideaForge Technology made a stellar debut at Dalal Street on Friday as the stock doubled investors' wealth on its maiden trading session, before seeing some profit booking after that. The stock corrected sharply before stabilizing around its listing price on the first trading session at the bourses.

Shares of ideaForge Technology were listed at Rs 1,305.10 on the BSE and at Rs 1,300 on the National Stock Exchange (NSE), signaling a premium of 94 per cent and 93 per cent, respectively over its issue price of Rs 672 apiece. The stock delivered a handsome listing gain to the investors.

However, even after the listing, shares of Ideaforge saw some buying interest as the stock rose about another 3 per cent to Rs 1,344, taking the overall gains exactly at 100 per cent over the given issue price. Though, it dived 6 per cent to Rs 1,257.80 on the back of profit booking but hovered around Rs 1,300 at 11.45 am.

Interestingly, the range-bound trade in the counter led to confusion among the investors who boggled if they should book the profits and take money off the table or is more upside left in the stock. Also, those who did not get the allotment wondered if there was still room for entry in the counter.

Most of the analysts have suggested investors to book profits after stellar listing gains, while investors with higher risk appetite can hold it for a longer run. However, they do not suggest any fresh entry at the current levels considering the sharp run-up.

Post listing the valuation would be stretched and difficult to sustain and recommend allotted investors to book profits on the listing day while risky fancy investors can hold for medium to long term to play on drone demand, said Prashanth Tapse, Senior VP Research at Mehta Equities.

The Rs 567-crore IPO of ideaForge Technology, which was sold in the range of Rs 638-672 had received a bumper response from the investors during the four-day bidding process between June 26-30 fetching an overall subscribed 106.06 times. It became the first IPO after 2021 to get bids for more than 100 times.

The IPO performed astoundingly with a listing gain of almost 100 per cent, we believe investors can stay invested if they have a long-term investment prospects for more than 12 to 18 months, said Mahesh M Ojha, AVP - Research and at Hensex Securities.

"The company being a single player to be listed, it has opened gates of opportunity to invest in a drone manufacturing company and it shall surely remain the centre of attraction. The industry exhibits good growth in the near future as the drone industry is one of the most fascinating and booming industries," he said.

Incorporated in 2007, ideaForge Technology is engaged in the business of manufacturing unmanned aircraft systems for mapping, security and surveillance. Mumbai-based ideaForge has been ranked seventh globally in the dual-use category (civil and defense) drone manufacturers.

While there is no doubt that this was a great opportunity for investors, and it has delivered some surprising returns, Investors should book profits and exit their positions, said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

"The stock is already trading at a significant premium to its issue price and there are some business-related risks associated with the company, so it is better to lock in these gains now rather than take the risk of carrying them forward. However, aggressive investors can still hold it with stop loss at Rs 1,170," she suggested.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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