India's Aeroflex soars as much as 82% in stellar market debut (updated)

Aeroflex Enterprises

31/08/2023 14:27

(Rewrites throughout with closing price, company comment,
background, analyst comment and financial results)
    By Hritam Mukherjee and Rama  Venkat
       BENGALURU, Aug 31 (Reuters) - 
    Shares of India's Aeroflex Industries  AERO.NS  surged as
much as 82% in their trading debut on Thursday before settling
51% higher, valuing the company at $255 million and making it
the latest stock to notch up strong gains in first-day trading.
  
        Aeroflex makes metallic tubes, hoses and other products
that are mainly exported for use in industries ranging from
fire-fighting to aviation.
  
        The initial public offering, which was subscribed 97.1
times, raised 3.51 billion rupees following strong demand from
investors.
  
        The Mumbai-based company joins 
    Mankind Pharma
      MNKI.NS  and 
    Concord Biotech
      CONB.NS  in a list of companies with stellar market debuts
as robust foreign inflows and domestic appetite for new listings
boost the confidence of firms heading for the capital market.
  
        Its products are more eco-friendly than rubber or
polymer ones as the emissions during manufacturing are 3-5 times
lower, Aeroflex Managing Director Asad Daud said.
  
    Aeroflex has the first-mover advantage in its space, which
explains the stellar demand in its IPO and trading debut, said
Prashanth Tapse, senior vice president of research at Mehta
Equities.
    Aeroflex's shares opened at a 76% premium to its IPO price
of 108 rupees and surged further before easing to end at 163.25
rupees, valuing the company at 21.11 billion rupees.
    The stock likely ran into some profit booking, Tapse said. 
    The company's parent, SAT Industries  STIN.NS  - a
textile-to-finance group - sold shares in the IPO, while well
known investor Ashish Kacholia also bought shares ahead of the
listing.
    Daud said the company plans to repay all its debt with
proceeds from the offering. Its outstanding debt was 394.4
million rupees as on July 31.
    Aeroflex's profit rose 9.6% in the year ended March 31,
2023, while revenue from operations climbed nearly 12%.
 
 ($1 = 82.7635 Indian rupees)

 (Reporting by Rama Venkat and Hritam Mukherjee in Bengaluru;
Editing by Nivedita Bhattacharjee, Eileen Soreng and Saumyadeb
Chakrabarty)
 ((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607;
 +91 8095218099;))