Ideaforge Technology IPO subscribed 106.05 times at close

The ₹567 crore IPO of Ideaforge Technology Ltd, consisted of a fresh issue and an offer for sale (OFS) of ₹240 crore and ₹327 crore respectively. The IPO saw fairly steady response on Day-1, Day-2 and Day-3 of the IPO and closed with extremely robust subscription numbers at the close of Day-4. In fact, the company got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-4, Ideaforge Technology IPO was subscribed at 106.05X overall, with best demand coming from the QIB segment followed by the retail segment and the HNI / NII segment in that order. In fact, the institutional segment and the HNI / NII segment saw very good traction on the last day. The HNI portion witnessed a surge of funding applications coming on the last day of the IPO. Retail portion as well as the employee portion got heavily oversubscribed. Here are the details of the overall allocation plan.

As of close of 30th June 2023, out of the 46.49 lakh shares on offer in the IPO (net of the anchor portion), Ideaforge Technology Ltd saw bids for 4,930.30 lakh shares. This implies an overall subscription of 106.05X. The granular break-up of subscriptions was in favour of the QIB investors followed by the retail investors and the HNI / NII investors in that order. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids and the HNI / NII bids. Both picked up substantial momentum on the last day.

Ideaforge Technology Ltd IPO Subscription Day-4

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 23rd June 2023, Ideaforge Technology Ltd did an anchor placement with 44.93% of the IPO size getting absorbed by the anchors. Out of the 84,41,764 shares on offer, the anchors picked up 37,92,894 shares accounting for 44.93% of the total IPO size. The anchor placement reporting was made to the BSE late on 23rd June 2023. The IPO of Ideaforge Technology Ltd opened on 26th June 2023 in the price band of ₹638 to ₹672 and closed for subscription on 30th June 2023 (both days inclusive). The entire anchor allocation was made at the upper price band of ₹672. Let us focus on the anchor allotment portion ahead of the Ideaforge Technology Ltd IPO. Here are the details of the anchor allocation.

The QIB portion (net of anchor allocation as explained above) has a quota of 25.29 lakh shares of which it has got bids for 3,181.11 lakh shares at the close of Day-4, implying a subscription ratio of 125.81X for QIBs at the close of Day-4. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Ideaforge Technology Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 80.58X (getting applications for 1,018.74 lakh shares against the quota of 12.64 lakh shares). That is a rather strong response at the close of Day-4 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was exactly visible as the overall HNI / NII portion on the final day of the IPO. However, the HNI portion did do extremely well in the final analysis.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 81.99X while the below ₹10 lakh bid category (S-HNIs) got subscribed 77.75X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was subscribed just 85.16X at the close of Day-4, showing very strong retail appetite. It must be noted that retail allocation is just 10% in this IPO. For retail investors; out of the 8.43 lakh shares on offer, valid bids were received for only 717.79 lakh shares, which included bids for 616.63 lakh shares at the cut-off price.

Ideaforge Technology was Incorporated in 2007 to engage in the business of manufacturing Unmanned Aircraft Systems (UAS). The UAS or drones are used extensively from mapping to army operations to minerals prospecting and even for delivery of pizzas. These drones are capable of a wide range of mining area planning, and mapping applications; apart from helping in the real estate businesses. Drones also assist the Indian defence forces and the Border Security Forces in conducting Intelligence, Surveillance, and Reconnaissance (ISR) operations along sensitive borders; where manual intervention cannot be risked.

The company operates through two principal software products viz. BlueFire Live and BlueFire Touch. Ideaforge Technology Ltd is an undisputed market leader in the UAS business with 50% market share as of FY22. Book running lead managers to the IPO are JM Financial and IIFL Securities Ltd. Link Intime India Private Ltd will be the registrars to the issue. The day wise progression of the subscriptions is captured in the table below.

The IPO is priced in the band of (₹638-₹672) and has closed for subscription as of the close of Friday, 30th June 2023.