Aeroflex Industries, backed by Ashish Kacholia, recently made headlines with its IPO debut. The company managed to raise a substantial Rs 351 crore during its IPO from August 22 to August 24. However, despite a stellar listing that saw its shares open at a premium of 83% over its issue price of Rs 108 on the BSE, Aeroflex Industries witnessed a sudden 16% drop in its share value during its first trading session.
The impressive debut garnered significant attention, with the stock soaring to Rs 197.40 on the BSE and Rs 190 on the National Stock Exchange (NSE). Investors were understandably delighted with these remarkable gains. Still, this initial euphoria gave way to selling pressure, causing the stock to dip to Rs 165.15 on the BSE. While this drop may have raised concerns among investors, many are now pondering whether to continue holding the stock or exit.
Aeroflex Industries' robust debut can be attributed to its dominant position in the market, along with substantial entry and exit barriers. This led to strong investor interest across different segments. Analysts who have been closely following the stock suggest that while investors who experienced a stellar debut can consider booking some profits, those with a long-term perspective may opt to hold the stock for the medium to long term.
Mahesh M Ojha, AVP – Research at Hensex Securities, suggests booking 50% profit at debut and holding the remaining shares for the medium to long term.
Aeroflex Industries, which caters to various industries with a diversified customer base and a wide range of products, holds great growth potential. The Rs 351-crore IPO was a massive success, with a subscription rate of 97.11 times. Qualified institutional bidders were particularly keen, with a subscription rate of 194.73 times. Non-institutional investors also showed strong interest, subscribing at an astounding rate of 126.13 times. Even retail investors weren't far behind, with a subscription rate of 34.41 times.
Aeroflex Industries has ambitious future strategies in place, including plans to expand its global and domestic businesses and invest in new technologies to enhance its products. With an export-oriented business model that generates approximately 80% of its revenue from exports, the company is poised for significant growth.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, believes that Aeroflex's strategic plans have the potential to drive long-term growth and profitability. Allottees who entered the IPO for listing premium gains are advised to maintain their stop loss at Rs 170 and await further upside. Those with a medium- to long-term perspective can also consider holding the stock.
Notable investors in Aeroflex Industries, including Ashish Kacholia, Jagdish Master, Vikas Khemani-led Carnelian Fund, and others, have collectively acquired a 7% stake in the company through multiple pre-IPO rounds. Pantomath Capital Advisors acted as the sole manager of the issue.
Established in 1993, Aeroflex Industries specializes in manufacturing and supplying environmentally friendly metallic flexible flow solution products. These solutions replace traditional rubber and polymer pipes and tubes, serving a wide range of industries.