 "IdeaForge Tech IPO to close on June 30; issue subscribed 32x so far")
The strong investor demand for the issue of IdeaForge Technology has prompted market regulator Sebi (Securities Exchange Board of India) to extend the company's initial public offer till June 30.
The drone manufacturer had launched its IPO for three days, starting on June 26. However, giving in to the request made by the company, Sebi has allowed the offer to run till Friday, June 30.
The Rs 567-crore IPO has witnssed massive investors' interest, especially in the retail investors and employee categories. Till 2:20 PM, the offer was subscribed 32 times, with retail portion subscription at nearly 58 times, employee portion at 54 times, NII at 50 times, and QIB at 15 times. Today is the third day of the offer.
IdeaForge's IPO is available in the range of Rs 638-672 apiece, with Rs 32 discount for employees. The management intends to utilise the net proceeds to repay debt, fund working capital requirements, invest in product development, and other general corporate purposes.
According to IPO Watch, the shares are commanding grey market premium (GMP) of Rs 550. At the upper end of the price band, this signals a likely listing price of Rs 1,222 and a listing gain of 82 per cent. The shares may debut on the NSE and BSE on July 10.
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According to analysts at Motilal Oswal Financial Services, the issue is fairly valued at 5x P/BV as against peer average of 8x on a post-issue basis. The company, they said, could benefit from the government's impetus to the defence sector and rising enterprise demand. Moreover, their wide or complex product portfolio, presence in niche space, strong client relationship, and high entry barriers may make the public issue attractive.
"Though the company saw revenue growth CAGR (compounded annual growth rate) of 237.4 per cent in FY20-22; heavy dependence on government-funded projects, single source of revenue, and entry of other major players (such as the Adani Group through joint ventures with foreign drone companies) can act as major risks. That said, comparing both risks and opportunities, we recommend 'subscribe' for investors with high-risk appetite," said those at Swastika Investmart.
Cyient DLM IPO status
Meanwhile, the IPO of the electronic manufacturing services (EMS) and solutions provider, which aims to mop up Rs 592 crore, has been subscribed nearly 6 times so far on the second day.
The issue opened on Tuesday, June 27, and will close on Friday, June 30.
The retail investors' quota has been subscribed 20.5 times, employee portion 79 per cent, NII 9 times, and QIB 5 per cent.
The shares are available at a premium of Rs 110 in the grey markets, suggesting a likely listing gain of 42 per cent at the upper price band.
The shares are available at a premium of Rs 110 in the grey markets, suggesting a likely listing gain of 42 per cent at the upper price band.
Cyient DLM is a subsidiary of Cyient, and provides electronic manufacturing services (EMS) and solutions. The company provides EMS as build-to-print (B2P) and build-to-specification (B2S) services.
The core solutions provided by Cyient DLM encompass various key components, including printed circuit board assembly, cable harnesses, and box builds. These components play a crucial role in safety of critical systems such as cockpits, inflight systems, landing systems, and medical diagnostic equipment. It has a customer base which includes global OEMs in the aerospace and defence, medical technology, and industrial sectors and its key customers include Honeywell International, Thales Global Services, ABB Inc, Bharat Electronics, and Molbio Diagnostics.
"Cyient DLM has strong industry tailwinds working in its favour as domestic EMS (electronics manufacturing services) industry is expected to grow at 32 per cent CAGR over FY22-27. Over FY21-23 period, Cyient DLM’s revenue growth is lagging peers at 15 pe cent CAGR; however, its strong order book provides decent visibility of accelerated growth going forward. It's valuation on P/E basis is reasonable compared to peers, at 66.2x FY23 earnings, considering the future growth opportunities. We recommend subscribing to the issue from long term perspective," said analysts a IPO note by Nirmal Bang.