Indian drone maker Ideaforge, whose subscription closed on June 30, 2023, has been listed today (July 7, 2023) at a premium of 94% on the NSE from its IPO issue price of Rs 672. The stock has attracted strong responses from all types of investors, be they QIB, institutional, employees, etc., due to its market leadership in the Indian Unmanned Aircraft Systems (UAS) drone market and its lack of direct peers in the listed space. Ideaforge Technology enjoyed a market share of 50% in FY22. The proceeds from the fresh issuance will be used for repayment of certain indebtedness, funding working capital requirements, investment in product development, and general corporate purposes.

The IPO was oversubscribed more than 40 time at close, with the qualified institutional buyers (QIBs) portion subscribed 44 times; non-institutional investors subscribed more than 30%; retail individual investors (RIIs) subscribed more than 45%; and Employees bid for more than 7 lakh shares, or 58%, as compared to 13,112 reserved for employees, as per NSE.

Why did IdeaForge give such premium listing gains?

India's drone industry is expected to see a strong fiscal year, with nearly $50 million in investments, compared to $25 million in FY2021-22. This growth is attributed to government policies, which have led to investor enthusiasm in the sector as 90% of the Indian airspace is now accessible for drone use. The Indian government has liberalized the policy for exporting drones or unmanned aerial vehicles (UAVs) for civilian use, aligning with the country's Foreign Trade Policy for 2023. This move will enable the global sale of drones previously restricted for export under the Special Chemicals, Organisms, Material Equipment, and Technology (SCOMET) list. The SCOMET license was required for the export of such items, leading to obstacles in the country's drone industry. The revised policy now allows civilian drones and UAVs with a range of 25 km or less and a payload of 25 kg or less, excluding software and technology.

IPOs that were listed in the previous year and given spectacular returns