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Published: July 1, 2023
Updated: July 1, 2023

IdeaForge Technology IPO Receives Record Subscriptions and Expects Strong Listing Gains

IdeaForge Technology has made history as the first initial public offering (IPO) to receive over 100 subscriptions. The IPO, which closed on June 30, 2023, garnered impressive subscription numbers across all categories. The retail category was subscribed 85.20 times, the QIB category 125.81 times, and the NII category 80.58 times.

Impressive Figures and Trading Details:

The face value of each share in the IPO is ₹10, with a total IPO size of ₹567.00 crores. The shares will be listed on both the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange). The lot size for this IPO is 22, indicating the minimum number of shares that can be applied for by an individual investor. IdeaForge Technology is offering 8,441,764 equity shares, with 842,865 shares allocated for retail investors, 2,528,596 shares for qualifying institutional purchasers, and 1,264,297 shares for non-institutional investors.

Anchor Investors and Recommendations:

IdeaForge Technology has attracted prominent anchor investors, with a total of 3,792,888 shares allocated at a price of ₹672 per share. Investors such as Goldman Sachs India Equity, Nomura Funds Ireland Public, Tata AIG General Insurance Company, Mirae Asset Focused Fund, HDFC Mutual Fund, Nippon Life India Trustee, and BNP Paribas Arbitrage hold significant portions. Additionally, 70% of stockbrokers have recommended applying for the IPO, highlighting its potential.

First-Mover Advantage and Valuations:

Experts believe that IdeaForge Technology benefits from being a first-mover in the drone- making industry. Consequently, the company is expected to trade at higher valuations. Market observers anticipate listing gains due to the smaller issue size and potential scarcity premium. SBI Securities stated that the unique growth story in the drone industry supports the expectation of expensive valuations for the company.

Positive Market Sentiments and Future Outlook:

The current year has seen a bullish market, with the Nifty surpassing the 19,000 milestone and the BSE Sensex crossing 64,000 on June 30. The market has experienced increased foreign institutional investor interest after a pause in the rate hike cycle. Market analysts predict a vibrant IPO market in 2023, with healthy activity in primary markets if equity market sentiments remain favourable.

Expectations for IPO Activity:

Industry experts, including Hardick Bora from Union Asset Management Company and Venkatraghavan S from Equirus, anticipate heightened IPO activity in the next six months. Bora believes that approximately ₹50,000 crore could be raised, with most of it occurring in the remaining months of CY23. However, as 2024 is an election year, a cautious outlook and bouts of volatility may emerge in Q4 of FY24.

IdeaForge Technology's IPO has achieved remarkable subscription numbers and expects strong listing gains. The company's first-mover advantage in the drone industry, along with positive market sentiments, contributes to its potential for success. As the IPO market remains vibrant, the next six months are poised to witness robust activity in the primary markets, with caution expected towards the end of FY24.