Airfloa Rail Technology made an impressive entrance on Dalal Street on Thursday, debuting at a remarkable 90% premium above its initial public offering (IPO) price. The stock commenced trading at Rs 266, significantly overshadowing the initial offering price of Rs 140.
IPO Subscription Surge
The IPO, which opened for subscription from September 11 to September 15, experienced an extraordinary demand, being oversubscribed by over 301 times. Retail investors showcased their enthusiasm by bidding 330 times the allotted quota, while non-institutional investors subscribed at a staggering rate of 350 times.
Qualified institutional buyers also demonstrated significant interest, subscribing 214 times. In total, the issue garnered more than 4.1 lakh applications, a strikingly high figure for a small and medium enterprise (SME) IPO, signifying a robust market interest.
The fervor surrounding the IPO was fueled by a confluence of strong financials, prestigious projects, and optimal market conditions. Airfloa Rail Technology has established itself as a pivotal contributor to the modernization initiative of the Indian Railways.
The company’s portfolio encompasses rolling stock components and comprehensive interior projects for notable trains, including the Vande Bharat Express, Agra-Kanpur Metro, Regional Rapid Transit System (RRTS), and Vistadome coaches. Additionally, it serves the aerospace and defense sectors, further solidifying its market standing.
Investors are drawn to the company’s robust financial performance. For FY25, Airfloa reported revenues of Rs 192.7 crore and a profit after tax of Rs 25.6 crore, showcasing impressive margins and compelling return ratios—return on equity at 30.6% and return on capital employed at 26.3%.
The company has consistently maintained EBITDA margins exceeding 24%, indicative of its operational efficacy in a capital-intensive industry.
Moreover, the government’s unwavering commitment to railway modernization and indigenization in defense has established a conducive environment for growth.
IPO Specifics
Priced at Rs 140 per share, the IPO included a fresh issuance of 65.07 lakh shares. The proceeds are allocated for capital expenditures (Rs 13.7 crore), repayment of borrowings (Rs 6 crore), and working capital requirements (Rs 59.3 crore).
The anchor book secured Rs 25.93 crore from investors a day prior to the opening, bolstering investor confidence. Consequently, post-issue, the promoter’s holding will decrease from 74.4% to 54.2%.
Source link: M.economictimes.com.
