The initial public offering (IPO) of Aeroflex Industries continued to receive a robust response from investors. While the issue was fully subscribed withing an hour of its opening; by 3:45 pm on its final day of bidding, the IPO saw subscription 91.64 times against its offer.
It has received bids for 212.77 crore shares against 2.32 crore shares on offer.
The category for qualified institutional buyers (QIBs) was subscribed to the most, 180.53 times, followed by the portion reserved for non-institutional investors (NII), which was subscribed to 125.34 times. Meanwhile, the retail investors' quota witnessed 31.82 times bid and the part reserved for 'others' saw 20.22 times subscription.
The QIB part received bids for 113.31 crore shares versus 62.76 lakh shares on offer while the NII quota received bids for 61.82 crore shares versus 49.32 lakh shares offered. The retail investor category received bids for 36.62 crore shares against 1.15 crore shares on offer. Finally, the 'others' portion received bids for 1.01 crore shares versus the 5 lakh shares on offer.
The issue was subscribed 6.77 times on Day 1 and 21.08 times on Day 2.
GMP: The company's shares in the grey market are trading at a healthy premium of ₹600, indicating a strong response to the issue.
However, one must note that the grey market premium is only an indicator of how the company's shares are performing in the unlisted market and can change quickly.
The ₹351 crore initial public offering of Aeroflex Industries opened for subscription on August 22 and will close today, August 24. The price band of the issue has been fixed in the range of ₹102-108 per share. The company doesn’t have any listed peers in India.
The IPO comprises fresh issuance of shares worth ₹162 crore and an offer-for-sale (OFS) of 1.75 crore shares worth ₹189 crore by promoter entity Sat Industries.
The fresh issue proceeds, excluding offer expenses, will be used for repaying certain borrowings, and for working capital requirements, with the remaining for general corporate purposes and acquisitions.
Aeroflex Industries is a manufacturer and supplier of environmentally friendly metallic flexible flow solution products. They cater to both global and domestic markets, exporting their products to over 80 countries, including Europe and the USA. The company’s product portfolio comprises Stainless Steel Corrugated Flexible Hoses (with and without braiding), SS Braiding, Interlock Hoses and Assemblies catering to a diverse range of end-user industries for the controlled flow of all forms of substances, including air, liquid, and solid.
The company's revenue from operations posted a CAGR of 36.43 percent in FY21-FY23 to ₹269.5 crore in the year ended March FY23 while profit recorded a CAGR of 124 percent in the same period to ₹30.15 crore. The EBITDA margin also expanded to 20.05 percent in FY23, from 19.39 percent in FY22 and 15.43 percent in FY21.
Most analysts have a ‘subscribe’ rating for the issue on the back of its dominant market share in the business, strong clientele, healthy financial performance, and decent return ratios.
Pantomath Capital Advisors is the merchant banker to the issue, and Link Intime India is the registrar to the offer.
The company is likely to finalise its allotment of IPO shares by August 29 and will transfer equity shares to the demat accounts of eligible investors by August 31, while the unsuccessful investors will get refunds by August 30.
Meanwhile, the stock will debut on the BSE and NSE on September 1.
