The 567-crore initial public offering of leading drone maker, IdeaForge, continues to see a strong response. The offer, which comes at a price band of ₹638-672 a share, was subscribed 13.27 times as retail investors, non-institutional investors and employees bid heavily.
The three-day initial share sale was supposed to close on June 29 but due to shifting of market holiday to Thursday, the company is yet to determine the closure date.
The company has reserved 75 per cent shares of the net offer for qualified institutional buyers, 15 per cent for high net worth individuals, and the balance 10 per cent for retail investors. The offer also includes a reservation of 13,112 equity shares for company’s employees who will get those shares at a discount of ₹32 per share to the final issue price. Investors can bid for a minimum of 22 equity shares and in multiples of 22 shares thereafter.
While portion of QIBs, who generally bid on the last day, subscribed just 1.34 times, the quota reserved for retail investors and HNIs was subscribed 36.36 times and 21.59 times, respectively. Employee portion saw bidding of 26.26 times at the end of Day 2.
Also read: IdeaForge Tech IPO: Should you subscribe?
Issue details
The IPO comprises fresh issuance of shares worth ₹240 crore and an offer-for-sale of 48.69 lakh equity shares by promoter and investors. Ashish Bhat, Amarpreet Singh, Nambirajan Seshadri, Naresh Malhotra, Sujata Vemuri, Sundararajan K Pandalgudi, A&E Investment LLC, Agarwal Trademart, Celesta Capital, Export Import Bank of India, Indusage Technology Venture Fund, Qualcomm Asia Pacific, and Society for Innovation and Entrepreneurship are the selling shareholders in the offer.
The fresh issue size has been reduced to ₹240 crore from ₹300 crore earlier as the company on June 15 raised ₹60 crore in a pre-IPO placement by issuing 8.92 lakh equity shares to institutional investors, including Tata AIG General Insurance, 360 ONE Special Opportunities Fund- Series 9 and 10, Motilal Oswal Midcap Fund, and Think Investments PCC.
Anchor investors
As part of IPO process, IdeaForge Technology has mopped up ₹254.88 crore from 31 anchor investors on Friday. The drone has finalised the allocation of 37.92 lakh equity shares to anchor investors at ₹672 a share, the higher end of the price band. Investors included Pinebridge Global Funds, Nomura Funds, Ashoka India Equity Investment Trust Plc, HSBC Mutual Fund, Goldman Sachs Funds, Carmignac Portfolio, Tata AIA General Insurance Company, ICICI Prudential Mutual Fund, Invesco India, Axis Mutual Fund, HDFC Mutual Fund, Nippon Life India, Aditya Birla Sun Life Trustee, Quant Mutual Fund and Max Life Insurance.
Utilisation of funds
The net proceeds from fresh issue will be utilised for repaying debts (₹50 crore), funding a working capital gap (₹135 crore), and investment in product development (₹40 crore), besides general corporate purposes.
IdeaForge is pioneer and the pre-eminent market leader in the Indian Unmanned Aircraft Systems (UAS) market with a market share of approximately 50 per cent in fiscal 2022. “Our UAVs are equipped with industry leading specifications and capabilities, comparable to those of other established global players in the UAV industry,” it said in its web site.