Making the first stellar move in 2018, Apollo Micro Systems made a blockbuster debut on the exchanges on January 22 (Monday).
The scrip got listed at Rs 478 at the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), which is up by 73.82 percent over its issue price of Rs 275 per share.
The institutional segment of the IPO saw nearly 1.2 times subscription while the segment reserved for retail investors was subscribed 40.19 times. The company plans to raise Rs 156 crore via IPO. The company will use the profits of the issue to meet working capital requirements.
With a price bracket of Rs 270 – 275, the issue saw oversubscription of 248.51 times between January 10 and January 12.
What is IPO?
An initial public offering or IPO is the first sale of stock by the owners of the company to the public or ‘stockholders’. Through IPO, a firm can raise new equity capital, plans massive expansion, monetize investments of private shareholders etc.
Companies can raise equity capital with the help of an IPO by issuing new shares to the public or the existing shareholders can sell their shares to the public without raising any fresh capital.
What is Apollo Micro System?
The Hyderabad-based firm is an electronic system and design manufacturing (EDSM) company. It caters to the defense and aerospace sectors and supplies hardware used in missiles, naval systems, and satellite space systems among others.
Aryaman Financial Services was the book running lead manager to the offer.
Should you invest in IPO?
Founded on March 3, 1997, the firm has a good track record in the development of new technologies and performing orders. Meanwhile, revenue grew by 54 percent annually in the past five financial years to reach Rs 211 crore in FY17.
The company, also, has qualified and experienced management with good control R&D capabilities.
However, it is advisable to think wisely, before finalizing anything. If you have decided to take a chance on an IPO, here are some points that you need to keep in mind:
It is advisable to consider waiting for the lock-up period to end:
The lock-up period is a legally binding contract (three to 24 months) between the underwriters and insiders of the company prohibiting them from selling any shares of stock for a specified period.
Pick a firm with strong brokers:
It is advisable to select a company that has a strong underwriter.
It is always advisable to read the full prospectus thoroughly before signing on the dotted line.