Multibagger IPO! Paras Defence among top 10 stocks that more than doubled investors' wealth on listing Day - check full list

Paras Defence & Space Technologies Ltd made history on the listing day as shares more than doubled from its issue price of Rs 175 and closed with gains of 185 per cent on the BSE on Friday.

The stock closed at Rs 498.75 on the BSE.

See Zee Business Live TV Streaming Below:

Paras Defence saw an overwhelming response from all the categories of investors. It received bids of 2,17,26,31,875 shares against the offered 71,40,793 equity shares.

The issue was subscribed 304.26 times making it the most subscribed IPO in history, followed by Salasar Technologies with 273.05 times, Apollo Micro Systems was subscribed 248.5 times.

The portion reserved for the Non-Institutional Investor category was subscribed 927.70 times and the retail investors was subscribed 112.81 times and, while the Qualified Institutional Buyer category was subscribed 169.65 times.

Not just Paras Defence but there are 9 more stocks that more than doubled on the listing day that include names like Burger King, IRCTC, Tatva Chintan, Bector Foods, Career Point, and Happiest Minds etc. among others.

Experts advise investors to stay put in the company and can even buy in the secondary market at current levels as the company has a niche presence in the defence as well as space sector.

“Paras Defence and Space Technologies had a stellar debut. It caters to optics, electronics, EMP protection solutions and heavy engineering segments in the defence/ space where GoI’s outlays is expected to increase at 16% CAGR to over USD14.5bn by 2031,” Hemang Jani, Head, Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services, said.

“Paras would be especially focusing on optics and drones which now forms ~67% of the order book (Rs 3bn). It is looking to tap import substitution opportunities under GoI’s Atmanirbhar Bharat and ‘Make In India’ initiatives,” he said.

“We like Paras given its complex/wide product portfolio, presence in niche defense/space, strong client relationship and high entry barriers. Given the huge impetus on the defense by the government, the stock presents good opportunity for investors to participate in this niche space,” added Jani.

Paras Defence is one of the leading providers of optics for various Indian defence and space programmes, and the only Indian company with the design capability for space-optics and opto-mechanical assemblies.

Defence has remained a focus area for the government. Report suggests that the capital outlay by the Indian Government on defence optics, defence electronics, Electromagnetic Pulse (EMP) protection solution and heavy engineering is expected to increase from USD 3.2 bn in FY21 to over USD 14.5 bn by FY31 (CAGR of 16.3%).

“While the company currently derives 85% business domestically, it has established strategic tie-ups with global defence electronics and optics companies to enhance its product qualities to global standards, which could help the company expand its presence in the export market,” Anshuman Khanna, Director, ValPro, said.

The way ahead:

As many as 30 companies could collectively raise over Rs 45000 crore through initial public offerings (IPOs) in the October-November period, PTI said in a report quoting merchant banking sources.

The report further added that of the total fundraising, a large chunk would be garnered by technology-driven companies. As many as 40 companies have floated their IPOs to raise Rs 64,217 crore so far in the year 2021.

“We had analysed that Investors are bullish on the potential of technology, innovation & consumption sectors. New edge tech companies like Zomato, Ease My Trip, Nazara, Paras Defence has bought confidence in the veins of startup promoters which has formed an IPO queue on exchanges,” Amit Pamnani, Chief Investment Office & DGM– Investment Banking , Swastika Investmart Ltd, said.

“Investors are fascinated to invest in the novel, bright segments and young founders." Apart from these tech companies, sectors like healthcare, Food, Metal may be of Investors’ delight as prospects of these sectors are optimistic,” he said.

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)