Aeroflex Industries slips on debut day after a stellar listing

• The stock made its debut at ₹210 as opposed to its IPO price of ₹108.
• The grey market is expecting 60% listing gains from the stock.
• The IPO was subscribed 97 times over the shares on offer.

The stock of Mumbai-based Aeroflex Industries made its debut on the D-street at a 83% premium on Thursday. But soon after, the stock started slipping and ended 17% lower on debut day, paring off its listing gains.

Its debut however was amongst the best in recent times, as it exceeded grey market expectations of a 60% premium.

Its market cap is at ₹2,715 crore, as per data on Bombay Stock Exchange. The IPO was subscribed 97 times over the shares on offer on the last day of the issue.

The grey market was expecting 60% listing gains from the stock. The IPO was subscribed 97 times over the shares on offer on the last day of the issue.

Qualified institutional buyers (QIBs) bid aggressively as this portion was subscribed 194 times. Non-institutional investor portion was subscribed 126 times. The retail portion was subscribed 34 times the shares on offer.

The company had also raised ₹103.68 crore from anchor investors like Societe Generale, Nippon Mutual Fund, Invesco Mutual Fund, White Oak Mutual Fund, BOI Mutual Fund, and more.

The ₹351 crore initial public offer (IPO) is a combination of fresh issue and offer-for-sale (OFS) with promoters and other shareholders offloading stake via the share sale.

The net proceeds of the fresh issue will be utilised towards full or part repayment and/or prepayment of outstanding borrowings; funding working capital requirements and for general corporate purposes and unidentified inorganic acquisitions.

Listing gains of the last five market debuts

While the market has seen a flurry of IPOs, the listing gains that they provided have been varied, with a few surprises and a few disappointments.

About the company

The company manufactures and supplies environmentally-friendly metallic flexible flow solution products to global as well as domestic markets from a single manufacturing facility in Taloja, Navi Mumbai.

The flexible flow solutions include braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, braiding, interlock hoses, hose assemblies, lancing hose assemblies, jacketed hose assemblies, exhaust connectors, exhaust gas recirculation (EGR) tubes and more.

These solutions are used for transfer of substances be it air, liquid and solid — in any industrial or commercial ecosystem. They connect the origin and end points of various processes. For example, flow solution products are required in fire sprinklers, gas supply, fueling and hydraulics in aircrafts.

The company has no listed peers in India, but the segment it operates in is fragmented and diversified. It can face competition from other large and small global and domestic players.