The Rs 351-crore initial public offering (IPO) of Aeroflex Industries will list on the exchanges on Thursday, August 31. The company sold its shares in the range of Rs 102-108 apiece, between August 22 and August 24, with a lot size of 130 equity shares.

Share Market Live

NSE

Just days ahead of the issue opening, marquee investors Ashish Kacholia and Jagdish Master have bought stakes in Aeroflex Industries. The Mumbai-based company is a subsidiary of Sat Industries, which is a listed company.

With the grey market premium (GMP) of the IPO being around Rs 65, the stock may see a positive debut. However, it is important to note that gray market premiums are just an indicator as to how the company's shares are stacked up in the unlisted market and are subject to change rapidly.

"Considering robust demand response by investors in all categories, investors are eagerly waiting for the Ashish Kacholia-backed Aeroflex Industries listing and we expect 50 percent and above listing gain from its issue price of Rs 108 apiece," Prashanth Tapse, Research Analyst, Sr VP Research at Mehta Equities.

However, the analyst recommended allotted investors to book profits on the listing day considering the subdued secondary market mood. "Those who look to buy on listing day should have a wait and watch approach before buying at debut price."

"Despite expensive valuations at the higher end, the offer received a stellar response for its unique eco-friendly product which is said to be an alternative to rubber based hoses and business demand for both international and domestic markets which justifies the premium listing," Tapse said.

"Hence, due to the new segment, it has no immediate peers to compare and thus it fetched demand on first mover advantage due to which there could be a good room for healthy 50 percent and above listing gains," he added.

Meanwhile, StoxBox research analyst Parth Shah expected the shares of Aeroflex Industries to open in the range of Rs 160-170 per share, an upside of around 60 percent over its upper band price of 108 per share.

Analysts mostly had a 'Subscribe' rating to the IPO considering the company's diversified product portfolio, strong financials, and also it enjoys a monopoly in its business as there are high barriers to entry and exit. The company currently has no listed peers.

The IPO was overall subscribed a stellar 97.11 times. The category for qualified institutional bidders was booked 194.73 times, the non-institutional investors' portion was subscribed 126.13 times, and the retail investors category was subscribed 34.41 times.

The issue comprised of a fresh equity of Rs 162 crore and an offer-for-sale (OFS) of up to 1.75 crore equity shares by promoters. Under the OFS, promoter SAT Industries will offload the 1.75 crore shares.

Since this is an OFS issue, the company will not receive any proceeds from the public offer.

Pantomath Capital was the sole book-running lead manager to the issue, while Link Intime India was the registrar.

Aeroflex’s business has effectively scaled its operational margins to 20.1 percent in FY23 as against 15.4 percent in FY21 and its debt-to-equity ratio has improved to 0.39 times in FY23 from 0.9 times in FY22.

The company's revenue during FY21-FY23 grew at a CAGR of 36 percent, while EBITDA and profit rose at a CAGR of 56 percent and 126 percent, respectively, during the same period.