ideaForge Tech IPO subscribes 3 times on Day 1 on strong retail demand

The initial public offering (IPO) of homegrown drone maker ideaForge Technology has been fully subscribed to on the first day of bidding on June 26, 2023, the Bombay Stock Exchange (BSE) data shows.

Against an issue size of 46.48 lakh, the company received bids for 1.39 crore equity shares, shows the latest data. At the time of filing the report, the issue was subscribed 3 times.

The retail individual investors (RIIs) quota was subscribed whopping 10.78 times, with 90,90,158 bids received for 8,42,865 shares on offer. The qualified institutional buyers (QIBs) quota received a total of 30,536 bids for a total of 25,28,596 bids on offer, thus subscribing by just 0.1%.

Non-institutional investors' quota was subscribed at 3.53% as 44,64,297 bids were received for a total of 12,64,297 shares on offer. The company had reserved 13,122 shares for its employees, for which it received 87,714 bids, thus oversubscribing by 6.69%.

The overall issue comprises fresh issuance of shares worth ₹240 crore, and an offer for sale of 48.69 lakh equity shares by selling shareholders. The company, in consultation with the BRLMs, had undertaken a pre-IPO placement worth ₹60 crore, which is why the size of the fresh issue has been reduced by ₹60 crore to up to ₹240 crore.

The company has meanwhile raised around ₹254.88 crore from anchor investors at ₹672/- per equity share.

"Trading Members of the Exchange are hereby informed that, under the Anchor Investors (AIs) portion in the Public Issue of Ideaforge Technology Limited, 37,92,894 equity shares have been subscribed today at Rs. 672/- per equity share. A copy of the Announcement dated June 23, 2023, issued by the Company in this regard is enclosed for your reference," the company informed the exchanges.

Considering this, the overall issue size has been reduced to 46.48 lakh shares from 84.4 lakh shares.

The drone manufacturing company opened its IPO for subscription on June 26 and it will close on June 29. The company has set a price band of ₹638-672 apiece for the public issue. The unmanned aircraft systems manufacturer is expected to raise around ₹567 crore as per the upper price band. The shares of the company are set to be listed on the exchanges on July 7, 2023.

The company intends to deploy the net proceeds from the issue to repay or prepay certain indebtedness, fund the working capital gap, invest in product development, and general corporate purposes. As of March 31, 2022, ideaForge Technology had a total assets, of ₹487.9 crore. The consolidated financials show it recorded a profit worth ₹40.7 crore as of March 31, 2023, and its income stood at ₹196.4 crore.

ideaForge claims to be the pioneer and the pre-eminent market leader in the Indian unmanned aircraft systems (“UAS”) market, with a market share of approximately 50% in Fiscal 2022, as per the 1Lattice report. The company had the largest operational deployment of indigenous UAVs across India, with an ideaForge-manufactured drone taking off every five minutes on average for surveillance and mapping during the nine months that ended December 31, 2022. The company is ranked 7th globally in the dual-use category (civil and defence) drone manufacturers as per the report published by Drone Industry Insights in December 2022.