IKIO Lighting IPO subscribed over 3.81x during the day 2 so far

The initial public offering (IPO) of IKIO Lighting continued to see strong demand from the investors during the second day of the bidding process. The issue had sailed through on the first day itself as it attracted overall bids for 1.55 times on day one. The issue had kicked off for subscription on Tuesday.

IKIO Lighting is selling its shares in the range of Rs 270-285 apiece till Thursday, June 8 in a lot size of 52 equity shares. The company is looking to raise Rs Rs 607 crore from its primary offering.

According to the data from the BSE, the investors made bids for 5,80,05,558 equity shares, or 3.81 times, compared to the 1,52,24,074 equity shares offered for the subscription by 1.30 pm on Wednesday, June 7, 2023.

The quota for non-institutional investors (NIIs) was booked 8.05 times, whereas the allocation for retail bidders fetched over 3.88 times subscription. The portion for qualified institutional bidders was subscribed 33 per cent at the same time.

Incorporated in 2016, the Noida-based IKIO Lighting manufactures light-emitting diode (LED) lighting solutions. The company is primarily an original design manufacturer (ODM). The company's LED lighting offerings focus on the premium segment.

The issue has gathered mostly positive views from the analysts who suggest subscribing to the issue citing its attractive valuations, high margin products, strong performance and growth potential. However, select analysts are cautious over its dependence on a single client, competitive industry, import concerns and limited product line as the key risks for the business.

"IKIO Lighting enjoys long term relationships with most of its clients Considering the healthy business prospects, company’s high return ratios & margins, debt repayment and valuation comfort at 47.8 times P/E on annualized FY23 financials," we recommend 'subscribe' to the issue, said Reliance Securities.

Company is well poised to capture the growth of the LED market with a diverse product basket & focus on high-margin areas. It enjoys long-term relationships with leading industry customers & has a strong focus on R&D. "We like the company as it has established infrastructure with backward integration along with strong and consistent financial performance," said Hem Securities with a 'subscribe' tag.

The net proceeds from the public offer will be used towards repayment of certain borrowings, investments in its subsidiary IKIO Solutions for setting up a new facility in Noida, and other general corporate purposes.

We believe IKIO offers investors an opportunity to invest in one of the growing ODM EMS businesses, which is well-positioned to capitalize on opportunities provided by the tailwinds in the LED lighting market driven in part by governmental policies for energy saving and environment protection, said Mehta Equities."

Considering companies and industrial growth rationales, it has recommended investors to 'subscribe' to the IKIO Lighting IPO offer with a long-term perspective. With market sentiments recovering if any listing gains over and above 25 per cent, shall be booked, it added.

A day before its issue, IKIO Lighting mobilized Rs 181.95 crore by allocation of 63.84 lakh equity shares to 16 anchor investors at a price of Rs 285 per share, the upper price band, the company said in a circular with BSE.

Motilal Oswal Investment and Advisors are book running lead managers to the issue, while Kfin Technologies is the registrar to the issue. The stock will be listed at both BSE and NSE.

(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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