Paras Defence and Space Technologies IPO was subscribed more than 220 occasions so far on the last day of the bidding, on the back of robust interest from Non-Institutional Investors (NIIs). In the principal marketplace, Paras Defence shares had been seen trading at a premium of Rs 255, more than the IPO value of Rs 175. Paras Defence and Space Technologies shares had been ruling at Rs 410 apiece, a premium of 146 per cent, in the grey marketplace, according to the people today who deal in unlisted shares of the organization.
So far on day 3, Qualified Institutional Buyers (QIB) have bid for 36 occasions their portion. Non-Institutional Investors (NII) have made bids for 750 occasions, and Retail investors have subscribed to their portion of the IPO 97 occasions. Retail investors have so far bid for 34.85 crore shares, for 35.85 lakh reserved for them. Non-institutional investors have placed bids for 115.18 crore shares, for 15.36 lakh reserved for them.
Should you invest in Paras Defence and Space Technologies IPO?
Paras Defence and Space Technology intends to expand its production capacity, strengthen its foothold in India’s increasing marketplace and also improve its international presence. Analysts mentioned that the organization would continue to focus on innovation and development which will be critical to remaining competitive. It also plans to diversify its merchandise and options portfolio by means of R&D and partnering with overseas technologies providers with specialized technologies in the field of defence and space sector. “The financial performance of the company has been muted over the last three years due to several challenges in the sector. The key risks include decline in allocation to defence and space budget by the government; and top 5 customers account for 60% of revenues,” analysts at Religare Broking, mentioned.
Those at Reliance Securities mentioned that the IPO is valued at 43x FY21 earnings, which does not look to be attractive. While the organization states there are no comparable peers for it, other defence providers like Hindustan Aeronautics Ltd (HAL) and Bharat Dynamics are trading at discounts in spite of creating healthful money flows and enjoying healthful FCF yield, they added. “Notably, India is witnessing path breaking reforms in defence space and is expected to see huge traction under Atma Nirbhar Bharat and Make in India initiatives. Further, a few Paras Defence and Space Technology products come under the list of 101 items for which there would be an embargo on the import as per a recent proposal by the Department of Military Affairs, MoD. This should essentially aid company to see sizeable order book in ensuing period,” they mentioned.
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