IKIO Lighting IPO Gets Strong Response On Day One, Subscribed Almost 50% Within Three Hours Of Bidding Process

Aug 06, 2023

IKIO IPO Day 1: Investors welcomed the initial public offering (IPO) of IKIO Lighting as the issue was subscribed nearly 50% within the initial 180 minutes of the bidding process on day one. The IPO of the Noida-based IKIO Lighting saw strong interest from both retail investors as well as non-institutional investors.

According to the BSE data, the investors placed bids for 79,42,220 equity shares, accounting for 52%, against the 1,52,24,074 equity shares offered for the subscription by 1 pm today.

The Rs 607 crore IKIO IPO kicked off today and the issue will be open to public subscription until June 8. The company has fixed the price band for its IPO at Rs 270-285 per share.

While the quota for retail bidders was booked 72%, the allocation for non-institutional investors received a 73% subscription. The portion for qualified institutional bidders was not even off the mark.

Ahead of the IPO, IKIO Lighting mobilised Rs 182 crore from 14 anchor investors. In an exchange filing the company informed that it allocated 63.84 lakh equity shares to anchor investors at Rs 285 per share on Monday.

The anchor investors who have invested in the company include HDFC Mutual Fund, ICICI Prudential, Goldman Sachs, Quant Mutual Fund, Malabar India Fund, Mirae Asset India, Rohdea Master Fund, Motilal Oswal Select Opportunities Fund, among others.

IKIO Lighting IPO GMP Today:

According to IPO watch, IKIO Lighting shares commanded a premium (GMP) of Rs 105 in the grey market today. This translates to a likely listing price of Rs 390 on the upper price band.

Lot Size

Investors are allowed to place bids for a minimum of 52 equity shares in one lot and in multiples of 52 shares thereafter. The minimum and maximum investment by retail investors in the offer would be Rs 14,820 per lot, and Rs 1,92,660 for 13 lots.

Company's financials and Risks involved:

For fiscal year 2023, the company reported consolidated revenue of Rs 331.84 crore compared to Rs 213.45 crore a year ago. The firm's net profit for the year stood at Rs 50.52 crore compared to Rs 28.81 crore in the year-ago period. The company's total debt as of December last year was Rs 145.27 crore.

Electronics is one of the fastest-growing industries in India. The total electronics market (which includes domestic electronics production and imports of electronic finished goods) in India is expected to grow at a CAGR of 17.9% to reach INR 17,902 billion (USD 240 billion)in Fiscal 2026.

According to the company's website, IKIO's largest customer is Signify Innovations India Limited, erstwhile Philips Electronics India Limited ("Signify (Philips)"), which according to Frost & Sullivan in Fiscal 2022 had a 50% market share in India's functional decorative lighting category and a 10% market share in India's true-blue decorative lighting segment.

For the nine-month period that ended December 2022, revenue from Signify Innovations India accounted for 70.04% of the company's restated revenue from operations. Furthermore, during this period the company derived over 85% of its revenue from the top twenty customers. In future, any cancellation by top customers or delay or reduction in their orders could adversely impact the company's business.

The company generates a considerable portion of revenue from LED lighting products which accounted for 91.27% of revenue. Any decline in orders for LED lighting product lines will likely harm the company's business.