Aeroflex Industries IPO opens today; GMP, price, and other details 

Aeroflex Industries IPO: The initial public offering (IPO) of Aeroflex Industries will open from August 22 to August 24, 2023. The company plans to list its shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), with a face value of Rs 2 per share and a price range of Rs 102 to Rs 108 per share. The lot size is 130 shares, and the total issue size comprises 3.25 crore shares, aggregating up to Rs 351 crore.

Issue size 

The IPO will have a fresh issue of 1.50 crore shares, aggregating up to Rs 162 crore. There will be an offer for sale of 1.75 crore shares at Rs 2 each, aggregating up to Rs 189 crore. 

GMP of the IPO

According to topsharebrokers.com, the Grey Market Premium (GMP) for Aeroflex Industries' IPO is currently at Rs 58 per share. Market observations indicate that Aeroflex Industries' shares are trading in the grey market at a premium of Rs 58 over the issue price. This value is slightly lower than the GMP observed on August 20, which stood at Rs 61.

Considering the GMP for the day and the upper limit of the price range, it's projected that Aeroflex Industries' shares could debut on the stock exchanges at approximately Rs 166 per share (Rs 108 + Rs 58). This potential listing price reflects a premium of over 53 per cent compared to the issue price.

Shareholding pattern and reservation 

Prior to the issue, the company's shareholding stood at about 11.43 crore. Post-IPO, the shareholding will increase to 12.9 crore shares. Qualified Institutional Buyers (QIBs) will be offered 50 per cent of the net offer, catering to institutional investors. Non-institutional investors (NIIs) or high-net-worth individuals (HNIs) will have a share allocation of 15 per cent of the offer, while retail investors will receive 35 per cent of the IPO shares.

Financial performance 

The total assets of the company rose from Rs 183.44 crore in FY22 to Rs 213.98 crore in FY23. The revenue rose from Rs 240.99 crore in 2022 to Rs 269.48 crore in 2023. This growth in revenue was also reflected in the profit after tax figures, which saw a positive increase from Rs 27.51 crore to Rs 30.15 crore in 2023. This upward trajectory in profitability highlights the company's efficient management and ability to translate increased revenue into improved earnings.

The net worth of Aeroflex Industries witnessed a remarkable rise as well, rising from Rs 86.22 crore in 2022 to Rs 114.09 crore in 2023. In terms of borrowing, the company saw a modest increase in its total borrowing, going from Rs 39.13 crore in FY22 to Rs 45.01 crore in FY23.

Objects of the Issue

The net proceeds from the IPO will be channelled towards repaying borrowings, supporting working capital needs, advancing general corporate initiatives, and potentially facilitating unidentified inorganic acquisitions as part of Aeroflex Industries' broader business strategy and expansion plans.

Should you subscribe?

According to market expert Ravi Singh, Aerofelx Industries' IPO price band is reasonably priced. 

"The company Aerofelx deals in the Flexible Flow solution area which has unique business model, with over 80 per cent revenue from exports. The company also has a status of Export Oriented Units. It is a dividend-paying company and the price band is reasonably priced. We recommend investors to Subscribe to this IPO from long term perspective," said Singh.

About the company 

Established in 1993, Aeroflex Industries Limited, formerly known as Suyog Intermediates Private Limited, is a manufacturer and supplier specialising in environmentally friendly metallic flexible flow solution products.

The company's range of products includes braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, interlock hoses, braiding, hose assemblies, lancing hose assemblies, jacketed hose assemblies, exhaust connectors, exhaust gas recirculation (EGR) tubes, expansion bellows, compensators, and associated end fittings. As of March 31, 2023, the company has an expansive product portfolio comprising over 1,700 distinct product SKUs (stock-keeping units).