Incorporated in 2016, the Noida-based IKIO Lighting manufactures LED lighting solutions, which is primarily an original design manufacturer in the premium segment. The initial public offering (IPO) of IKIO Lighting continued to see strong demand from investors during the third and last day of the bidding process. The issue, which had sailed through on the first day, attracted overall bids 6.83 times by the end of the second day of the bidding session.
IKIO Lighting is selling its shares in the range of Rs 270-285 apiece till Thursday, June 8 in a lot size of 52 equity shares. The company is looking to raise Rs 607 crore from its primary offering. The issue opened on Tuesday, June 6. According to the data from the BSE, the investors made bids for 28,32,70,572 equity shares, or 18.61 times, compared to the 1,52,24,074 equity shares offered for the subscription by 1.15 pm on Thursday, June 8. The quota for non-institutional investors (NIIs) was booked 38.13 times, whereas the allocation for retail bidders fetched over 10.38 times subscription. The portion for qualified institutional bidders was subscribed 18.62 times at the same time.
Last heard, the company was commanding a premium of Rs 125-130 per equity share in the grey market, suggesting an upside potential of 45 per cent over the upper price band limit of the issue. The company's premium in the official market has been moving higher. Incorporated in 2016, the Noida-based IKIO Lighting manufactures light-emitting diode (LED) lighting solutions. The company is primarily an original design manufacturer (ODM). The company's LED lighting offerings focus on the premium segment.
The issue has gathered mostly positive views from analysts who suggest subscribing to the issue citing its attractive valuations, high-margin products, strong performance and growth potential. However, select analysts are cautious over its dependence on a single client, competitive industry, import concerns and limited product line as the key risks for the business.
"IKIO Lighting enjoys long-term relationships with most of its clients Considering the healthy business prospects, company’s high return ratios & margins, debt repayment and valuation comfort at 47.8 times P/E on annualized FY23 financials," we recommend 'subscribe' to the issue, said Reliance Securities.
The company is well poised to capture the growth of the LED market with a diverse product basket & focus on high-margin areas. It enjoys long-term relationships with leading industry customers & has a strong focus on R&D, said Hem Securities with a 'subscribe' tag. The net proceeds from the public offer will be used towards repayment of certain borrowings, investments in its subsidiary IKIO Solutions for setting up a new facility in Noida, and other general corporate purposes. A day before its issue, IKIO Lighting mobilized Rs 181.95 crore by allocation of 63.84 lakh equity shares to 16 anchor investors at a price of Rs 285 per share, the upper price band, the company said in a circular with BSE.
Motilal Oswal Investment and Advisors are book-running lead managers to the issue, while Kfin Technologies is the registrar to the issue. The stock will be listed at both BSE and NSE.
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