Retail investors lap up IdeaForge IPO – issue fully subscribed on Day 1

• IdeaForge IPO has received a spectacular response from retail investors.
  
• The company’s issue has been commanding a premium of over ₹450 in the grey market.
  
• The company will use the IPO proceeds to repay debt, fund working capital requirements, invest in product development etc.
  

The ₹567 crore initial public offer of drone company IdeaForge was fully subscribed within a few hours of opening on Monday, June 26. The issue that opened at 9:00 am was subscribed 1.4 times over as of 1:00 pm.

The IPO has received spectacular response from retail investors as the retail portion, at the time of publishing, has been subscribed five times over. However, the qualified institutional buyers (QIB) portion – which is the largest portion of the issue on offer, have received the least number of bids as compared to the shares on offer. It's noteworthy that generally these investments pick up on day two and three of the public offer.

As much as 75% of the offer is reserved for QIBs while 15% is meant for non-institutional investors, and 10 percent has been set aside for retail investors.


Source: BSE

As of Monday, the company’s issue is commanding a premium of over ₹450 in the grey market, according to media reports. Grey market premium (GMP) is the premium at which an unlisted stock is traded in an unofficial market.

The company which was set-up in 2007, manufactures and deploys drones with applications across mapping, security and surveillance. As of 31 May 2023, it catered to 265 clients spanning across Indian defence customers and civil customers comprising certain of the central armed police forces, state police departments, disaster management forces, forest departments and private contractors.

“Their drones assist defence forces in conducting intelligence, surveillance and reconnaissance (ISR) operations along borders, help navigate a wide range of mining area planning and help boost construction and real estate,” said a report by Stoxbox.

The public issue includes an offer for sale as well as fresh issue, and the proceeds from the fresh issue will be used towards repayment and prepayment of loans, funding working capital requirement, investment in product development and general corporate purposes.

“Due to their leadership and first mover advantage, they have been able to improve users' experiences by incorporating consumer data and ongoing technological advancements,” says Stoxbox which had a ‘subscribe’ rating on the issue for the benefit of listing gains.