Aeroflex Industries IPO: Ashish Kacholia-backed IPO Oversubscribed In An Hour Of Opening; These Are Top Buyers

Aeroflex Industries received robust demand from high-networth and retail investors on the first day of its initial public offering (IPO). In just an hour of opening, the IPO is oversubscribed by 1.98 times. The company plans to raise Rs 351 crore through the offer, and its proposed equity shares will be listed on exchanges BSE and NSE. Ace investors like Ashish Kacholia and Jagdish Master have picked up a stake in the company ahead of the IPO.

As per the regulatory filing, the IPO received bids of 4,66,30,870 equity shares against the offered size of 2,32,17,667 equity shares --- registering a subscription of 2.01 times. The IPO was fully subscribed within an hour of opening.

Currently, the portion reserved for retail individual investors (RII) subscribed 2.64 times. Noninstitutional investors (NIIs) aka HNIs portion subscribed by 3.20 times, becoming the biggest buyers of the IPO. However, there has been almost nil demand from qualified institutional buyers (QIBs).

The IPO opened on August 22, and will close on August 24. It has a price band of Rs 102 to Rs 108 per equity share. The bid lot size is 130 Equity Shares and in multiples thereof.

Pantomath Capital Advisors is the book-running lead manager of the IPO, while Link Intime India is the registrar.

On Wednesday, the grey market premium (GMP) of Aeroflex is Rs 68 per share. As per TopShareBrokers, this suggests a 62.96% premium listing to Rs 176 per share (upper price band of Rs 108 + Rs 68 per share).

Aeroflex plans to utilise the proceeds of the fresh issue for repayment of certain outstanding secured borrowing, funding of working capital, and general corporate purposes.

On Monday, the company raised Rs 103.7 crore from anchor investors. Among the investors were Nippon Life, Societe Generale, Invesco, Winro Commercial India, Bank of India Mutual Fund, Whiteoak Capital Mutual Fund, Quantum State Investment Fund, and Universal Sompo General Insurance Company.

Aeroflex manufacturers and supplies environment-friendly metallic flexible flow solution products including braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, braiding, interlock hoses, hose assemblies, lancing hose assemblies, jacketed hose assemblies, exhaust connectors, exhaust gas recirculation (EGR) tubes,
expansion bellows, compensators and related end fittings collectively known as flexible flow solutions catering to global as well as domestic markets.

The company exports its products to more than 80 countries including Europe, the USA and others. For Fiscals 2023,2022 and 2021, its exports were Rs 2,171.80 million, Rs 2,035.59 million and Rs 1,171.15 million which constituted 80.60%, 84.53%, and 80.90% of our revenue from operations respectively.

Aeroflex plans to expand its portfolio of solutions to capitalize on large opportunities across industrial segments. Further, it is looking to scale up in-house design and R&D efforts.

Also, the company plans to expand its operations in geographies such as the USA, Europe, Far East Region and Middle East and North Africa (MENA) region by opening up of own strategic delivery locations in these regions, expanding its share of supplied products, as well as by diversifying its portfolio.

Aeroflex believes that through the implementation of tools and techniques such as the Internet of Things (IoT), Machine Learning systems and Industry 4.0 for our relevant machines or equipment, and hence it will also support the identification of improvement areas and thus aim to bring synergies to the operational and business performance improvement process.