Aeroflex makes stellar debut, lists at 83% premium over its issue price
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Aeroflex Industries, backed by popular investor Ashish Kacholia, made a strong debut on exchanges as shares listed at 83 per cent premium of Rs 197.40 over its issue price of Rs 108 per share on the BSE on Thursday.
On the National Stock Exchange (NSE), the stock listed at Rs 190, a 76 per cent premium to the issue price.
At 10:03 am; Aeroflex quoted at Rs 178.15, 65 per cent higher to the issue price, while it touched a low of Rs 174 in Thursday's intra-day trade so far. A combined 15.5 million shares changed hands on the NSE and BSE.
Aeroflex’s impressive performance can be attributed to its dominant position in the market, characterised by substantial entry and exit barriers. The company's initial public offering (IPO) received significant investor interest from both institutional and retail segments.
Currently, the company has no listed peers. It has an export-oriented business model, and generates around 80 per cent of its revenue from exports alone. Aeroflex's future strategies look promising. The company plans to expand its global and domestic businesses and is investing in new technologies to improve its products.
Pravesh Gour, Senior Technical Analyst, Swastika Investmart believes that these strategies have the potential to drive long-term growth and profitability for the company.
"Allottees who applied for the public offering for listing premium are advised to maintain their stop loss at Rs 170 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock," he suggested.
The initial public offering of Aeroflex Industries got a huge response from all categories of investors. The issue was subscribed 97.1 times. The institutional portion was subscribed 194 times, whereas the wealthy investor portion 126 times, and retail investor portion 34 times.
Aeroflex Industries is a global flexible flow solutions provider operating in addressable market, which caters to diverse industry segments with export-oriented business model.
Analysts believe that the company has a unique business model in the flexible flow solution area. With decent return ratios and margins, the risk reward ratio for long term investors looks favourable, they added.
"On FY23 financials, the IPO was valued at 42x P/E, 26.6xEV/Ebitda and 5.3x EV/sales. The company is likely to benefit from growth prospects in traditional industrial segments like manufacturing, automotive, oil & gas among others as well as emerging industries like solar, lithium-ion battery management and robotics among others," said analysts at Reliance Securities.
Moreover, strong track record of commercialising, scaling up new products, and R&D capabilities put the company in a good position to capture the requirements of diverse end user industrial sectors.
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