Aeron Composite IPO Lists at ₹150, Surges 20% Over Issue Price

Aeron Composite, a manufacturer and supplier of Fiber Glass Reinforce Polymer (FRP) products, made a strong debut on the Indian stock market on Wednesday, 4th September 2024, with its shares listing at a significant premium to the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, setting the stage for an impressive market debut.

• Listing Price: Aeron Composite shares were listed at ₹150 per share on the NSE SME platform, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Aeron Composite had set its IPO price at ₹125 per share.
• Percentage Change: The listing price of ₹150 on the NSE SME translates to a premium of 20% over the issue price of ₹125.

First-Day Trading Performance

• Opening vs. Closing Price: Aeron Composite's share price hit the 5% upper circuit limit following its strong opening. By 10:25 AM, the stock was trading at ₹157.50.
• Market Capitalisation: At 10:25 AM, the company's market capitalisation stood at ₹257 crore.
• Trading Volume: More than 12 lakh shares changed hands in early deals, with a traded value of ₹18.87 crore.

Market Sentiment and Analysis

• Market Reaction: The market reacted positively to Aeron Composite's listing. The strong listing premium and hitting the upper circuit indicate robust demand and investor confidence in the company's prospects.
• Gains for Investors: Investors who received allotments in the IPO and sold their shares at the upper circuit price would have realised substantial gains of ₹32.50 per share or 26% over the issue price of ₹125.
• Grey Market Premium: Before listing, shares were trading at a premium of 27% in the grey market, indicating strong investor interest.

Growth Drivers and Challenges

Expected drivers of future performance:

• Strong presence in domestic and international markets
• Diverse product portfolio with applications in various industries
• Expansion of manufacturing capabilities

Potential challenges:

• Competition in the FRP industry
• Dependence on raw material prices and availability

Utilisation of IPO Proceeds

Aeron Composite plans to use the funds for:

• Setting up an additional manufacturing unit in Gujarat (₹39.03 crore)
• General corporate purposes

Financial Performance

The company has demonstrated strong financial growth:

• Revenue from operations increased from ₹78.82 crore in FY21 to ₹179.38 crore in FY23
• Profit After Tax (PAT) rose from ₹2.55 crore in FY21 to ₹6.61 crore in FY23

As Aeron Composite begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the FRP industry and new manufacturing capabilities to drive future growth and shareholder value.