Ideaforge Technology, a manufacturer of drones, debuted on July 7 and immediately posted the greatest performance among IPOs listed since November 2021. The stock increased by about 93 percent on a day when the financial markets saw a pullback following their record highs.
This is the first drone-related firm to list on a stock exchange.
The shares began at Rs. 1,300 on the NSE, up 93.5 percent from the Rs. 672 issue price, exceeding experts’ listing estimates by a wide margin. Analysts had predicted a premium of between 75 and 77 percent upon launch.
Ideaforge reached a day’s low of Rs. 1,260 (up 87.5%) and an intraday high of Rs. 1,343.95, over double the issue price. Even the day’s low exceeded the listing price forecasts because the stock appears to be benefiting from a first-mover advantage, solid equity market conditions, and the unmanned aircraft systems industry’s promising future.
It should be mentioned that the Rs 567 crore public offering by the drone manufacturer received 106.6 subscriptions from June 26–30.
The closing price of Ideaforge shares on the NSE was up by 92.78 percent at Rs 1,295.50, with a volume of 6.49 lakh shares, whereas it was higher by 92.70 percent at Rs 1,294.95.
“Ideaforge Technology made a tremendous entry into the market and this is a significant gain of around 93 percent for investors,” said Anubhuti Mishra, an equity research analyst at Swastika Investmart.
Investors should book profits and exit their positions, she said, despite the fact that there is no denying that this was a fantastic opportunity for investors and that it has produced some unexpected results. This is due to the stock already trading at a large premium to its issue price after the listing.
Furthermore, “the company carries some business-related risks, so it is better to lock in these gains now rather than take the risk of carrying them forward,” according to Anubhuti. However, big investors might still hold it with a stop-loss at Rs. 1,170.
As post-listing prices are stretched and difficult to maintain, Prashanth Tapse, Sr. VP Research Analyst at Mehta Equities, also advised profit taking. However, riskier fancy investors can hold for a medium- to long-term to capitalize on the demand for drones.
Latent View Analytics was the last company to record such a strong result on a listing day before Ideaforge. On November 23, 2021, it gained 148 percent for the day to conclude at Rs 488.5.
The year 2021 was a good time to list. In addition to Latent, other companies with gains between 60 and 270 percent on listing day include FSN E-Commerce Ventures (Nykaa), Tatva Chintan Pharma Chem, Zomato, Clean Science and Technology, GR Infraprojects, MTAR Technologies, Nureca, Tega Industries, Sigachi Industries, Paras Defence, Go Fashion, and Indigo Paints.