Paras Defence and Space Technologies shares were in very high demand among the investors as its share sale via initial public offering (IPO) was oversubscribed within an hour of opening. Paras Defence's IPO was subscribed 4.69 times by 11:06 am, data from the National Stock Exchange showed. Over 3.34 crore bids were received for Paras Defence shares compared with 71.40 lakh shares on the offer. A total of 2.73 crore bids were received at the cut-off price.
Paras Defence and Space Technologies shares in very high demand particularly among the retail individual investors as the portion reserved for them was subscribed 6.13 times. While, non-institutional investors and qualified institutional buyers (QIBs), which include financial institutions and foreign institutional investors showed subdued interest for Paras Defence shares. Portion reserved for non-institutional investors was subscribed 0.07 times while QIBs did not place any bids for Paras Defence shares, NSE data showed as of 11:10 am.
The Mumbai-based Paras Defence and Space Technologies, which is primarily engaged in the designing, developing, manufacturing, and testing of a variety of defence and space engineering products, is planning to raise Rs 170.78 crore in the IPO which consists of fresh issue of Rs 140.60 crore and an offer for sale of Rs 30.18 crore.
Paras Defence has priced its shares in the band of Rs 165 to 175 per share in the IPO which will end on September 23. A retail investor can place bids for Paras Defence shares in a lot size of 85 shares up to maximum of 13 lots. At the upper price band one lot of Paras Defence shares will cost Rs 14,875.
The company will utilise the IPO proceeds to purchase machinery and equipment, fund incremental working capital requirements and for general corporate purposes.
Should You Invest In Paras Defence IPO?
"We like Paras Defence and Space Technology Limited given its complex/wide product portfolio, presence in niche defence space, strong client relationship and high entry barriers. The issue is valued at 1.9 times price to book value on a post issue basis, which is reasonable. We believe Paras Defence could benefit from government impetus on the defence and space expenditure. Hence we recommend subscribe. Further given the current buoyant market and high interest for defence stocks, the issue could see listing gains as well," brokerage firm Motilal Oswal said in a note.