Aeroflex Industries, a manufacturer and supplier of metallic flexible flow solution products, made a stellar debut on the stock exchanges on Thursday, with its shares listing at a premium of 82.7% against the issue price. The stock opened at ₹197.40 against the initial public offering (IPO) price of ₹108 on the BSE.
On the NSE, Aeroflex shares listed at ₹190, up 76% against the issue price. Post listing, Aeroflex share price gained as much as 81.8% to ₹196.35, with 2.38 lakh crore shares changing hands over the counter on the NSE.
The strong debut of ace investor Ashish Kacholia-backed Aeroflex Industries was better than Street estimates as the stock was commanding a premium of ₹70 per share in the grey market, indicating a premium listing of around 65% over its issue price.
“This impressive performance can be attributed to its dominant position in the market, characterised by substantial entry and exit barriers. The company's initial public offering received significant investor interest from both institutional and retail segments. The company currently has no listed peers. It has an export-oriented business model, and it generates around 80% of its revenue from exports alone,” says Pravesh Gour, Senior Technical Analyst, Swastika Investmart.
Analyst at Swastika says that Aeroflex's future strategies look promising. “The company plans to expand its global and domestic businesses, and it is investing in new technologies to improve its products. We believe that these strategies have the potential to drive long-term growth and profitability for the company.”
Pravesh Gour recommended allottees, who applied for the public offering, to maintain their stop loss at ₹170 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock.
The ₹351-crore IPO of Aeroflex managed to garner overwhelming response from investors with the IPO subscribing by 97.11 times, which opened between August 22-24. The quota reserved for qualified institutional buyers (QIBs) was booked 194.73 times, followed by high non-institutional investors (NIIs), which received 126.13 times bids. The portion for retail investors was subscribed 34.41 times.
As per the document filed with the SEBI, the IPO consisted of fresh issue of equity shares up to the value of ₹162 crore and an offer-for-sale (OFS) of up to 1.75 crore equity shares by the promoters and existing shareholders.
The company plans to use funds raised from the issue of fresh equity shares to pay up debt, meet working capital needs, as well as for acquisitions for inorganic development.
Ahead of the IPO, the company raised ₹103.68 crore from 10 anchor investors, including mutual funds, large insurance and NBFC treasuries, alternative investment funds (AIFs), and foreign portfolio institutions.
Formed in 1993, Aeroflex Industries, previously known as Suyog Intermediates, manufactures and supplies metallic flexible flow solution products such as braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, braiding, interlock hoses, exhaust gas recirculation (EGR) tubes, expansion bellows, compensators, and related end fittings. Its manufacturing facility is situated at Taloja, Navi Mumbai, Maharashtra, and is spread across 3,59,528 square feet of area. As of March 31, 2023, the company recorded more than 1,700 Product SKUs (Stock Keeping Units) in its product portfolio.
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