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| PC: ideaForge Technology Pvt. Ltd. |
Leading drone manufacturer ideaForge Technology has made an extraordinary debut in the stock market, with its shares surging 94% on the BSE (Bombay Stock Exchange) and 93.45% on the NSE (National Stock Exchange). ideaForge's IPO saw strong demand and the company's shares opened at INR 1,305.10 on BSE and INR 1,300 on NSE, beating the expected issue price range of INR 638-672 per share. This exceptional listing reflects the growing interest in the drone industry and underscores ideaForge's immense growth potential.
Strong IPO response and stellar listings
ideaForge's initial public offering (IPO) received an overwhelmingly positive response from investors, with the total issue effectively oversubscribed 106 times. The QIB (Qualified Institutional Buyers) category witnessed a remarkable subscription of 125.81 times, while the retail and non-institutional investors categories recorded 85.2 times and 80.58 times subscription respectively. This enthusiastic response underscores the market's confidence in ideaForge's potential and its leading position in the Indian Unmanned Aircraft System (UAS) market.
Dominating the Indian Drone Market
As the pioneer and market leader in the Indian UAS market, ideaForge Technology has a huge market share of nearly 50% in FY 2022. The company has the largest operational deployment of indigenous drones in India, averaging an impressive average of forge-built. The drone takes flight every five minutes for surveillance and mapping purposes. The reliability, performance and integration capabilities of IdeForge's drones have made the company an industry leader.
Expert recommendations for investors
While IdeForge's stock market debut has yielded remarkable returns to investors, market analysts suggest that it may be prudent to book profits and evaluate exit strategies at this stage. The stock is already trading at an outstanding premium to its issue price and there are business-related risks associated with the company. Anubhuti Mishra, equity research analyst at Swastika Investmart, advises caution and recommends securing profits now rather than carrying them forward. However, more aggressive investors can opt to hold the stock by applying a stop loss at INR 1,170.
Potential growth opportunities and challenges
Analysts at Motilal Oswal Financial Services highlight ideaForge's complex product portfolio, niche market presence, strong customer relationships and high entry barriers as factors driving the company's success. The IPO was valued at 5 times price-to-book value (P/BV) ratio and Ideaforge is expected to benefit from increasing demand from government initiatives and initiatives in the defense sector. However, it is worth noting that the company's profit after tax declined by 27.3% in FY23 due to significant expenses incurred due to employee stock ownership plans (ESOPs).
ideaForge Technology's stellar debut on the Indian stock exchange shows a promising outlook for new-age Indian startups considering a public listing. A remarkable 94% premium reflects the market's recognition of Ideaforge's potential. Nevertheless, the long-term sustainability of new-age tech stocks ultimately depends on positive cash flow. As investors celebrate this extraordinary debut, industry participants eagerly anticipate how ideaForge will navigate the evolving landscape of the drone industry.
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