Best Defense IPO: It is the only Indian company to have the capability of space optics and opto-mechanical assembly. On the first day of bidding on 21st September 2021, Paras Defense’s IPA has received an overwhelming response from investors.
On its first day on September 21, the IPO was subscribed 16.5 times and received bids of 11.82 crore shares. By the second day, 14.19 crore shares were bid while the bid size is 71.40 lakh shares. Yesterday, bids of Rs 2000 crore were placed while the size of this IPO is Rs 170.77 crore.
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This IPO has received tremendous response from retail investors. The retail portion of the IPO was filled 31.37 times on the first day. While the share of non-institutional investors was filled 3.75 times. While the share of qualified institutional investors filled 1 per cent.
What was the reason for the strong response?
Akhil Rathi of Marwari Shares says that due to the small size, there was a strong response on the first day of the IPO. The company provides a wide range of products and solutions to the defense and space sectors. The company will further benefit from self-reliant India and Make in India. The valuation of the company is also very attractive. Its market cap is Rs 682.5 crore.
Long term investors can expect good returns from this investment. As of June 2021, the company has orders worth around Rs 305 crore. Due to which good growth is expected in its income. Paras Defense has a wide range of products and has a good list of good customers. This will give good benefit to the company going forward.
Gaurav Garg of Capital Via says that going forward, the company will get good benefits of diversification in the defense and space sectors. The company specializes in drone tech. Apart from this, the company also produces cameras used in the sector in space. The long term outlook of the company is very good. Keeping in mind the investors, investors are advised to invest in this IPO for medium to long term.
Aastha Jain of Hem Securities says that it is a defense sector company. Which currently looks very attractive. Due to the government’s focus on defence, huge amount of investment is coming in this sector. Which will benefit companies like Paras.
Apart from this, the size of this IPO is quite small. Due to which people made tremendous purchases on the first day due to demand supply contraction. Apart from this, no other IPO is open for subscription, so we also saw funds coming in this IPO.