 "IdeaForge Technology doubles investors' wealth on stock market debut")
Drone maker IdeaForge Technology made a stellar stock market debut on Friday, with its shares getting listed at Rs 1,305.10 apiece on the BSE, a 94 per cent premium over its issue price of Rs 672 per share. The stock opened at Rs 1,300 on the National Stock Exchange (NSE).
Post listing, the market price of the company doubled against its issue price, hitting a high of Rs 1,344 on the BSE in the intra-day trade. At 10:09 am, IdeaForge was trading at Rs 1,268, 88 per cent higher against its issue price. A combined 5.1 million shares have, thus far, changed hands on the NSE and BSE.
"While there is no doubt that this was a great opportunity for investors, and it has delivered some surprising returns, we would recommend that investors should book profits and exit their positions. This is because, after listing, the stock is already trading at a significant premium to its issue price. Additionally, 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," said Anubhuti Mishra, equity research analyst at Swastika Investmart.
She, however, added that aggressive investors can still hold the stock with a stop loss at Rs 1,170.
The Rs 567.24-crore initial public offer (IPO) of IdeaForge had received strong response from all categories of investors, with the overall issue getting subscribed 106 times. The Qualified Institutional Buyers (QIBs) category was subscribed 125.81 times. The portion for Retail Individual Investors (RIIs) fetched 85.2 times subscriptions, and the non-institutional investors' part got subscribed 80.58 times.
IdeaForge is the pioneer and the preeminent market leader in the Indian unmanned aircraft systems (UAS) market, with a market share of approximately 50 per cent in fiscal 2022. They had the largest operational deployment of indigenous UAVs across India, with an Ideaforge manufactured drone taking off every 5 minutes on average for surveillance and mapping as of fiscal 2023. Their customers have completed over 350,000 flights using the company's UAVs as of March 31, 2023.
Beyond the UAVs, they undertake a full integration of their payloads, communication system and packaging. Ideaforge also built their own software stack required for flight safety, autopilot sub-system, battery, power, and communication in their UAVs.
The company reaps an advantage of being a pure play in Drone manufacturing division over its peers, according to analysts.
Analyst at Motilal Oswal Financial Services had said in their IPO note that they like IdeaForge for its complex/wide product portfolio, presence in niche space, strong client relationship and high entry barriers.
"The issue was valued at 5x P/BV (peers avg: ~8x) on a post issue basis, which is fairly valued. We believe the company could benefit from government impetus on the defence space as well as rising enterprise demand," the brokerage noted.
Post listing, the market price of the company doubled against its issue price, hitting a high of Rs 1,344 on the BSE in the intra-day trade. At 10:09 am, IdeaForge was trading at Rs 1,268, 88 per cent higher against its issue price. A combined 5.1 million shares have, thus far, changed hands on the NSE and BSE.
"While there is no doubt that this was a great opportunity for investors, and it has delivered some surprising returns, we would recommend that investors should book profits and exit their positions. This is because, after listing, the stock is already trading at a significant premium to its issue price. Additionally, 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," said Anubhuti Mishra, equity research analyst at Swastika Investmart.
She, however, added that aggressive investors can still hold the stock with a stop loss at Rs 1,170.
The Rs 567.24-crore initial public offer (IPO) of IdeaForge had received strong response from all categories of investors, with the overall issue getting subscribed 106 times. The Qualified Institutional Buyers (QIBs) category was subscribed 125.81 times. The portion for Retail Individual Investors (RIIs) fetched 85.2 times subscriptions, and the non-institutional investors' part got subscribed 80.58 times.
IdeaForge is the pioneer and the preeminent market leader in the Indian unmanned aircraft systems (UAS) market, with a market share of approximately 50 per cent in fiscal 2022. They had the largest operational deployment of indigenous UAVs across India, with an Ideaforge manufactured drone taking off every 5 minutes on average for surveillance and mapping as of fiscal 2023. Their customers have completed over 350,000 flights using the company's UAVs as of March 31, 2023.
Beyond the UAVs, they undertake a full integration of their payloads, communication system and packaging. Ideaforge also built their own software stack required for flight safety, autopilot sub-system, battery, power, and communication in their UAVs.
The company reaps an advantage of being a pure play in Drone manufacturing division over its peers, according to analysts.
Analyst at Motilal Oswal Financial Services had said in their IPO note that they like IdeaForge for its complex/wide product portfolio, presence in niche space, strong client relationship and high entry barriers.
"The issue was valued at 5x P/BV (peers avg: ~8x) on a post issue basis, which is fairly valued. We believe the company could benefit from government impetus on the defence space as well as rising enterprise demand," the brokerage noted.