The issue saw applications for 15,08,47,800 shares against the total issue size of 71,40,793 shares. This means the offer has been subscribed nearly 21 times as of 10.45 am.
One major reason behind the exuberance may be the massive demand for shares in the grey market. The company has fixed the price band at Rs 165-175 apiece for the issue, whereas the shares are trading a hefty premium of about 120 per cent over its issue price.
The company plans to raise a total Rs 170.78 crore from the market. Paras Defence has already allotted 29,27,485 equity shares to anchor investors at Rs 175 apiece, valuing the transaction at Rs 51.23 crore, according to a circular uploaded on the BSE website.
Ashoka India Equity Investment Trust Plc, Abakkus Emerging Opportunities Fund-1, Saint Capital Fund, Nippon India Mutual Fund and HDFC Mutual Fund participated in the anchor book, it showed.
Most of the analysts are also positive on this defence sector play.
Brokerage firm Reliance Securities has a word of caution for investors and has not given any rating to the issue. It finds the IPO richly valued, which diminishes expectations of listing gains for investors.
“While the company states there are no comparable peers for it, other defence companies like Hindustan Aeronautics and Bharat Dynamics are trading at discounts despite generating healthy cash flows and enjoying healthy FCF yield,” it said.
