Drone-maker IdeaForge scores bumper IPO listing; doubles investor wealth
What's the story
If you invested in drone-maker IdeaForge, you are in for a significant bump in your wealth. The company made a great debut on BSE on Friday, getting listed at Rs. 1,305.10 per share, 94.21% above its IPO issue price, the highest among listed companies this year. On NSE, the stock was listed at Rs. 1,300 with a 93.45% premium.
Context
Why does this story matter?
IdeaForge's better-than-expected debut might come as a surprise to many. It is a testament to the company's potential in India's unmanned aircraft systems (UAS) market. Although a four-figure start was anticipated, the listing price on both BSE and NSE has blown predictions out of the water. Investors would be hoping that ideaForge will continue its forward march in the UAS space.
IPO
The IPO's price band was Rs. 638-672
For the IPO, IdeaForge set the price band between Rs. 638 and Rs. 672 per equity share. The company is the leader in the UAS market in India. Between June 26 and 30, the IPO was subscribed 106.6 times. Qualified institutional investors (QIBs) bought 125.81 times the allotted quota, retail investors 85.1 times, and non-institutional investors (NIIs) 80.5 times.
Gray market
IdeaForge's listing beat gray market expectations
The listing beat gray market expectations. Based on its performance in the gray market, IdeaForge was expected to command a premium of Rs. 515. The listing price was expected to be over Rs. 1,000. Analysts anticipated a listing premium in the range of 50-70%. The company, however, managed to go beyond that on the listing day.
Money raised
The company raised Rs. 567 crore via IPO
IdeaForge raised Rs. 567 crore through the IPO, including a fresh issue of shares worth Rs. 240 crore and an offer of sale of equity shares worth Rs. 327 crore. The new issuance was earlier set at Rs. 300 crore. Proceeds from the fresh issuance will be used for debt settlement, working capital needs, product development, and general corporate purposes.
ideaForge
IdeaForge is the market leader in India's drone space
IdeaForge was set up in 2007. It manufactures and deploys drones for civil and defense customers. As of May 31, 2023, the firm has catered to 265 clients. It had a 50% share in India's UAS market in FY22. The Mumbai-based company was ranked seventh globally in the dual-use category. Its market leadership and lack of direct rivals attracted the strong response from investors.