IKIO Lighting Shares Are Listed Today With A 37.7% Premium. Investors: Should they buy, sell, or hold?

On Friday, June 16, shares of IKIO Lighting, a producer of LED lighting solutions, had a spectacular debut on the NSE and BSE stock markets. IKIO Lighting is listed for Rs 391 per share on the BSE, compared to the issue price of Rs 270–285 per share. The stock began trading on the NSE at a premium of 37.7% to the issue price, or Rs 392.5 per share.

IKIO Lighting’s maiden equity auction, which was up for bids from June 6 to June 8, brought in roughly Rs 607 crore. With a lot size of 52 equity shares, the business had established a price range for the offering of Rs 270-285 per share. During the three-day bidding procedure, the issue received a robust reaction from the investors.

The IPO received a total of 66.30 times subscription, with qualified institutional bids (QIB) receiving 163.68 times subscription, non-institutional investors (NIIs) receiving 63.35 times subscription, and retail investors receiving 13.86 times subscription.

“Better-than-expected response to its offer across investor categories was mainly due to its business model of original design manufacturing (ODM), followed by higher operating margins compared to peers and reasonable discounted valuations at the time of IPO when compared to listed peers,” said Prashanth Tapse, VP-Research, Mehta Equities.

IKIO Lighting, a company located in Noida, was founded in 2016 and produces LED lighting products. The business mostly produces original designs (ODM). Offerings for LED lighting from the firm are geared at the high-end market.

The issue’s registrar was Kfin Technologies, and the book-running lead manager was Motilal Oswal Investment and Advisors.

IKIO Lighting raised Rs 181.95 crore by allocating 63.84 lakh equity shares to 16 anchor investors at the top price range of Rs 285 per share, the business said in a statement, a day before the offer opened for subscription.

To pay off debt, invest in its subsidiary IKIO Solutions to build a new facility in Noida, and for other general business objectives, the company will utilize the net proceeds from the public offering.

Is it better to buy, sell, or hold?

IKIO Lighting Ltd. achieved a solid market entry at a listing price of Rs. 392, according to Anubhuti Mishra, an equity research analyst at Swastika Investmart Ltd. The company’s issue price in the top band was Rs 285; hence, the benefit for investors is almost 37% more than anticipated. We still have a positive outlook on this because of its strong emphasis on R&D and backward integration, its long-standing client relationships, and its consistent financial performance. Therefore, we advise investors to hold onto this share for longer by maintaining a stop loss 10% below its listing price.