ideaForge IPO opens for subscription today, GMP soars 70%; should you subscribe?
ideaForge IPO: ideaForge’s Rs 567 crore IPO opens for subscription today, 26 June. The public offering comprises a fresh issue of shares up to Rs 240 crore and an offer for sale (OFS) component with the promoters divesting 48.7 lakh shares. ideaForge has set the price band for the IPO at Rs 638-672 per equity share. ideaForge shares’ grey market premium soared 70% on Monday, commanding a premium of Rs 475 over the IPO price, implying a listing price of Rs 1,147 per share at the upper edge of the price-band.
The fresh issue portion from offer has been reduced to Rs 240 crore from Rs 300 as ideaForge raised Rs 60 crore by offloading 8.92 lakh shares to institutional investors in a pre-IPO placement round. The IPO will close for subscription on 29 June. The date of allotment of units is projected to be 4 July, following which, the issue is expected to list on the bourses on 7 July.
ideaForge manufactures Unmanned Aircraft Vehicles for Mapping, Security & Surveillance. These drones are capable of a wide range of mining area planning, and mapping applications. ideaForge UAVs help construction and real estate boost their operations. They also assist defense forces in conducting Intelligence, Surveillance, and Reconnaissance (ISR) operations along borders.
Should you apply for the IdeaForge IPO?
“We believe ideaForge IPO offer gives investors an opportunity to invest in one of the first pioneer and pre-eminent market leader in the Indian Unmanned Aircraft Systems (UAS) drone market. Its leadership position and first-mover advantage drive their growth through a self-propagating flywheel. With a diverse range of products offering feature-based differentiation. They stand out as one of the few vendors globally to provide a full stack UAV solution, including ground control software, firmware, and robust after-sales support.
On valuation at upper band of Rs. 672 the issue is asking a market cap of Rs 2,800 crore and based on FY23 earnings, P/E stands at 87x which means the issue is priced a bit expensive with no clear peers to compare in drone space. Based on the industry fancy demand and growth in the recent performance, the issue fetches the first mover listing advantage in the segment, hence we recommend investors may consider subscribing the issue for listing gain only.”
Motilal Oswal: Subscribe
“ideaForge has one of the industry’s leading product portfolios with dual presence in both civil and defence applications. IFL’s revenue jumped >5x over FY21-23 to Rs 1.9 billion, while PAT turned positive in the last two years, with FY23 profit at Rs 320 million. Hence we recommend Subscribe. Further given the current buoyant market and high interest for defence stocks, the issue could see listing gains as well.”
Dilip Davda: May subscribe
“If we attribute FY23 earnings to post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 87.50. Thus the issue pricing is very aggressive and is asking for a fancy premium considering the hype created by the Drone segment. The company is the Indian leader in the UAS segment. It has posted growth in its top lines but for FY23, its bottom line marked decline due to ESOP impact. Though based on FY23 performance, the issue appears aggressively priced, well-informed/cash surplus investors may consider parking funds for long-term rewards.”
As an AI language model, I don't have access to real-time financial data or market information beyond my last knowledge update in September 2021. Therefore, I cannot provide specific advice on whether you should subscribe to the idea Forge IPO or comment on its current GIMP (Grey Market Premium) since I don't have access to the latest information.
However, when considering whether to subscribe to an IPO, it's generally a good idea to conduct thorough research on the company's fundamentals, financial performance, competitive landscape, growth prospects, and the overall market conditions. Additionally, it's advisable to consult with a financial adviser or professional who can provide personalise advice based on your investment goals, risk tolerance, and other individual factors.
It's also important to note that investing in IPOs can be risky, as the performance of newly listed companies can vary significantly. Therefore, it's crucial to make informed decisions and consider the potential risks involved.
Please ensure you consult with up-to-date sources and financial professionals for the most accurate and relevant information regarding the idea Forge IPO and its current market conditions.
