Aircraft systems maker ideaForge Technology's IPO opened for subscription today, and the offer will close on June 29, 2023. The leading drone manufacturer has set the issue price band at Rs 638-672 per share. ideaForge shares were being traded with massive 70-75% grey market premium of Rs 490 on Monday
Through this IPO, ideaForge is planning to mop up Rs 567 crore at the upper end of the price band. The offer comprises fresh issuance of shares worth Rs 240 crore and an offer-for-sale of 48.69 lakh equity shares by promoter and investors. The offer also includes a reservation of 13,112 equity shares for company's employees who will get those shares at a discount of Rs 32 per share to the final issue price
As of 11:10 am, the retail individual investors and employee reserved categories were fully booked, 2.11 times and 2.05 times, respectively. Non-institutional investors (NIIs) attracted 45 per cent of the bids so far; while the qualified institutional buyer (QIB) portion failed to attract any bids.
Investors can bid for a minimum of 22 equity shares and in multiples of 22 shares thereafter. Hence, the minimum investment by retail investors would be Rs 14,784 per lot and the maximum would be Rs 1,92,192 for 13 lots as they are allowed to invest up to Rs 2 lakh. The company has reserved 75% shares of the net offer for qualified institutional buyers, 15% for HNIs and the balance 10% for retail investors
ideaForge was founded in 2007 by IIT Bombay alumni Ankit Mehta, Rahul Singh, Vipul Joshi, and Ashish Bhat. The unmanned aerial vehicle (UAV) firm, now one of the largest drone-makers in India, had humble beginnings in IIT-Bombay’s innovation cell. The company was built with a mission to develop technically superior UAVs for intelligence, surveillance, and reconnaissance (ISR), utilising modern advancements in aerospace and robotics
In a media interview in 2021, one of the co-founders Ankit Mehta had revealed that ideaForge was bolstered in its resolve to use its UAV drone technology for security use in the aftermath of the 2008 Mumbai terror attacks. Over the years, ideaForge has showcased its knack for innovative solutions. It made its mark as the first in India to develop and manufacture vertical take-off and landing (VTOL) drones
ideaForge has been backed by several marquee investors, including Qualcomm Asia Pacific, Infosys, and Celesta Capital. Florintree Enterprise LLP, backed by former Blackstone India Head Mathew Cyriac, is one of the largest shareholders in the company with 11.85% stake. Venture capital investor Celesta Capital holds 12.78% stake in the company, while Infosys has 4.25% stake, and Qualcomm Asia owns 3.63%
ideaForge is the leader in the Indian unmanned aircraft systems (UAS) market, with a market share of approximately 50% in FY22, as per 1Lattice Report. It 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 FY23
ideaForge was ranked seventh globally in the dual-use category (civil and defence) drone manufacturers as per the report published by Drone Industry Insights in December 2022. The company primarily caters to customers in defence, and civil segments comprising armed police forces, state police departments, disaster management forces, forest departments, and private contractors in connection with smart cities
ideaForge recorded a 27.3% decline in profit for 12 months ending March 2023 to Rs 32 crore, down from Rs 44 crore, but revenue from operations in the same period increased by 16.66% to Rs 186 crore. In FY21, it had a loss of Rs 14.6 crore on revenue of Rs 34.72 crore. It had an outstanding order book of Rs 192.27 crore as of March 2023, declining from Rs 310.87 crore in FY22
ideaForge IPO share allotment will be finalised by July 4, 2023, while the equity shares will be transferred to demat accounts of eligible investors by July 6. The unsuccessful investors will get their refunds by July 5. ideaForge shares will be listed on NSE and BSE on July 7
Giving a 'subscribe' tag to ideaForge IPO, Motilal Oswal said, "We like IFL given its complex/wide product portfolio, presence in niche space, strong client relationship and high entry barriers. The issue is valued at 5x P/BV (peers avg: ~8x) on a post-issue basis, which is fairly valued. We believe IFL could benefit from government impetus on the defence space as well as rising enterprise demand. Hence we recommend Subscribe. Further, given the current buoyant market and high interest for defence stocks, the issue could see listing gains as well."
Marwari Financial Services said also had a 'Subscribe' call on the issue. It said, "We assign “Subscribe" rating to this IPO as company is pioneer and the pre-eminent market leader in the Indian UAS industry, with first-mover advantage and strong relationships with a diverse customer base. Also, it is available at a reasonable valuation considering the future growth potential of the company."
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