ideaForge Technology IPO: Issue subscribed 106.05 times on closing day, strong QIB demand seen; check latest GMP here

The initial public offering (IPO) of ideaForge Technology continued to witness stellar response from investors on Friday. The drone manufacturer's initial share sale was subscribed 106.05 times so far of the final day of bidding. All the portions of the IPO were fully booked on the second day of issuance itself. The Rs 567 crore-initial share sale was extended by a day to June 30 after market holiday was shifted to June 29 from June 28 earlier, as per revised fixtures available on BSE. The IPO received 49,30,29,570 today against the issue size of 46,48,870 shares. The company has announced to sell its shares in the fixed price band of Rs 638-672 apiece. The retail individual investors, employee reserved and non-institutional investor (NII) categories were subscribed 85.16 times, 96.59 times and 80.58 times, respectively. The qualified institutional buyer (QIB) quote saw the maximum push on the closing day as it was subscribed 125.81 times.

The issue includes issuance of fresh equity shares worth Rs 240 crore and an offer for sale (OFS) of 4,869,712 equity shares amounting to Rs 326.44 crore by promoters and existing shareholders. Investors can make a bid of a minimum of 22 equity shares and its multiples thereafter.

The company has reserved 13,112 shares in the public issue for its employees, who will get a discount of Rs 32 apiece for the issue. 75 per cent of the net offer is reserved for QIB, while NIIs will get 15 per cent of the offer. Retail bidders would be allocated with the remaining 10 per cent of the offer.

Latest grey market premium

Market participants said Fusion Micro Finance IPO's grey market premium (GMP) was last seen at Rs 520 today, slightly down from Wednesday's Rs 540 and Tuesday's 545 levels. Considering the latest GMP of Rs 520, the grey market is expecting the drone maker to list around Rs 1,192 (Rs 672 + Rs 520), a premium of 77.38 per cent over the IPO's upper band price of Rs 672 per equity share.

Ahead of its IPO, ideaForge raised Rs 254.88 crore from 31 anchor investors by allocation of 37.92 lakh equity shares at Rs 672 per share which saw participation from marquee investors including Nomura, Invesco, HSBC, Goldman Sachs among others.

Net proceeds from the fresh issue would be utilised towards repayment or prepayment of certain debt availed by the company, funding working capital requirements, investment in product development and general corporate purposes.

A majority of the brokerages have remained positive on the issue citing the rising demand of drones, niche business model and positive outlook for the sector. However, a few have a word of caution too due to expensive valuations.

"The issue is priced at approximately 87.61 times based on the FY23 financials. Despite its high cost, IdeaForge IPO may attract significant subscription due to the company's dominance and the favorable momentum in the primary markets," Manan Doshi, UnlistedArena.com, told Business Today.

As of fiscal 2023, the company has the largest operational deployment of indigenous UAVs (unmanned aerial vehicles) across India with an Ideaforge-manufactured drone taking off every five minutes -- on average -- for surveillance and mapping, said, Manish Khanna, Co-Founder at Unlisted Assets.

JM Financial and IIFL Securities are the book-running lead managers to the issue, while Link InTime India has been appointed as the registrar. Shares of the company would be listed on both BSE and NSE, likely on July 7.

Incorporated in 2007, ideaForge Tech is engaged in the business of manufacturing unmanned aircraft systems (UAS) for mapping, security and surveillance. These drones are capable of a wide range of mining area planning, and mapping applications.

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