Aeroflex Industries’ Rs 351-crore IPO opened for bids on Tuesday and the GMP jumped over 60%. Should you subscribe to the issue?
Aeroflex Industries IPO: Aeroflex Industries’ Rs 351-crore IPO opened for subscription today, 22 August. The public offer comprises a fresh issue of shares worth Rs 162 crore and an offer-for-sale (OFS) component with promoters and shareholders offloading shares totalling Rs 189 crore. The firm has set the price band for the IPO at Rs 102-108 per equity share. Aeroflex Industries shares’ grey market premium gained 63% on Tuesday, commanding a premium of Rs 68 over upper end of the IPO price, implying a listing price of Rs 176 per share.
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Ahead of the issue opening, Aeroflex Industries raised Rs 103.68 crore from various anchor investors on 21 August. The IPO will close for subscription on 24 August. The date of allotment of units is projected to be 29 August, following which, the issue is expected to list on the bourses on 1 September. The issue was fully subscribed as of 10:54 a.m. on Tuesday, with retail investors and non-institutional investors bidding 1.46 times and 1.31 times for their portion each.
Aeroflex Industries, a subsidiary of SAT Industries manufactures and supplies environment friendly metallic flexible flow solution products like multiple variety of hoses, tubes and hose assemblies. The company’s clientele includes distributors, fabricators, maintenance repair and operations companies (MROs), original equipment manufacturers (OEMs), and companies operating in a wide range of industries. Moreover, the company has recently forayed into manufacturing products made of bronze. The company’s products replace flow solutions made of rubber and polymers. Flexible flow solutions made with stainless steel corrugation are becoming a preferred solution because of their advantages. The company recorded more than 1,700 Product SKUs (Stock Keeping Units) in its product portfolio.
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Should you apply for the Aeroflex Industries IPO?
Swastika Investmart: Subscribe
“Aeroflex Industries Limited is a well-established company with strong financial growth, and it enjoys a monopoly in its business as there are high barriers to entry and exit. The company currently has no listed peers. It has an export-oriented business model, and it generates around 80% of its revenue from exports alone, but that exposes it to risks related to international operations. The company does not have any long-term contracts with either its supplier or customer, which is another concern related to this business.
Despite these concerns, Aeroflex’s future strategies look promising. The company plans to expand its global and domestic businesses, and it is investing in new technologies to improve its products. We believe that these strategies have the potential to drive long-term growth and profitability for the company. Overall, we believe that the Aeroflex Industries Limited IPO is a good investment opportunity. We recommend SUBSCRIBE this IPO.”
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Reliance Securities: Subscribe
“On FY23 financials, the IPO is 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. Moreover, a strong track record of commercialising and scaling up new products and R&D capabilities puts the company in a good position to capture the requirements of diverse end user industrial sectors. In view of diversified product portfolio, strong financials, global footprint, focus on expanding its capacities, products and R&D capabilities, we recommend a SUBSCRIBE to the issue.”
