Aeron Composite IPO Sees Explosive Demand: Fully Subscribed on Day 1 with Retail and NII Portions Oversubscribed—Check GMP and More!

The Aeron Composite IPO opened for subscription on Wednesday, August 28, and will close on Friday, August 30. The shares are priced between ₹121 to ₹125, with a face value of ₹10 each. Investors must place a minimum bid of 1,000 shares. The company raised ₹15.17 crore from anchor investors by allocating 12,14,000 equity shares at ₹125 per share.

About Aeron Composite Ltd

Aeron Composite Ltd manufactures and sells Fiber Glass Reinforce Polymer (FRP) products for various industrial uses. Their product line includes FRP rods, molded gratings, and pultruded items. The company provides a full range of services, including design, prototype development, testing, production, logistics, installation, and after-sale support.

FRP products are made from a polymer matrix, reinforced with fibers like aramid, carbon, or fiberglass. These products are known for being lightweight, corrosion and chemical-resistant, non-conductive electrically and thermally, easy to fabricate, and very strong.

Market Position and Clients

According to their red herring prospectus, there are no listed companies in India with a similar business model, making industry-wide comparisons difficult. Aeron Composite serves over 800 clients globally, operating in more than 30 countries. Their revenue comes from both domestic and international sales across sectors like communications, oil and gas, refineries, renewable energy, and chemicals.

For the quarter ending February 29, 2024, and the fiscal years ending 2023, 2022, and 2021, export sales made up 56.16%, 52.38%, 34.71%, and 36.37% of the company’s total revenue, respectively. Domestic sales accounted for the remaining 43.84%, 47.62%, 65.29%, and 63.63%.

Subscription Status on Day 1

By the end of the first day, the Aeron Composite IPO was subscribed 2.03 times overall. The retail portion was oversubscribed 2.49 times, while the non-institutional investor (NII) portion was subscribed 1.03 times. Qualified Institutional Buyers (QIB) booked 1.98 times the shares available to them.

As of 4:22 PM IST, the company received bids for 57,62,000 shares against the 28,36,000 shares on offer, according to data from Chittorgarh.com.

IPO Details

The Aeron Composite IPO aims to raise ₹56.10 crore, which includes a fresh issue of 4,488,000 equity shares with a face value of ₹10 each. There is no “offer for sale” component in this IPO. The funds raised will be used for general corporate purposes and to finance capital expenditures for establishing a new production unit.

Maashitla Securities Private Limited is the registrar for the IPO, and Hem Securities Limited is the lead manager. Hem Finlease is the market maker for this offering.

Grey Market Premium (GMP)

The Aeron Composite IPO’s grey market premium (GMP) was ₹0 on the first day, meaning the shares were trading at their issue price of ₹125 with no premium or discount in the grey market, according to investorgain.com. The GMP reflects the market’s willingness to pay above the issue price.