Aeron Composite lists at 20% premium over issue price; shares hit 5% upper circuit after listing

Aeron Composite Limited shares listed at a 20% premium over the issue price on the NSE SME platform, Emerge, on Wednesday, September 4.

Aeron Composite Ltd shares started trading at ₹150 apiece, reflecting gains of 20% over the issue price of ₹125. More than 12 lakh shares of the company changed hands in early deals. The traded value stood at ₹18.87 crore. The market valuation stood at ₹257 crore.

After listing, the stock hit an upper circuit of 5% to trade at ₹157.50 per share at around 10:25 am.

Meanwhile, the benchmark index Nifty declined by 0.65% or 165 points to 25,114 in morning trade.

Aeron Composite Ltd is a manufacturer and exporter of glass fibre-reinforced polymer products (FRP). These products have various industrial applications, including oil and gas, water treatment, etc.

The company launched its initial public offering on the NSE SME platform from August 28 to August 30, 2024, to raise around ₹56.10 crore from public investors. The IPO comprised a fresh issue of 44.88 lakh shares.

The company fixed the price band at ₹121 to ₹125 per share. The minimum lot size was 1,000 shares, and the minimum investment required was ₹125,000.

At the close of bidding on August 30, the IPO was booked 41 times. Investors placed bids for 11.64 crore shares worth ₹1,455 crore against 28.36 lakh shares offered for subscription. The non-institutional investors’ quota was booked 75 times, the retail investors’ portion was booked nearly 34 times, and the qualified institutional buyers’ category was booked nearly 28 times.

Ahead of the IPO's launch, the company raised ₹15.18 crore from 10 anchor investors, including India Ahead Venture Fund, Nav Capital VCC, and AG Dynamic Funds Limited.

The company allotted 12.14 lakh shares at a price of ₹125 per share.

The company finalised the IPO share allotment on September 2 (Monday) and initiated refunds and credit of shares to Demat accounts on September 3.

Aeron Composite has proposed using the IPO proceeds to finance the capital expenditures for setting up an additional manufacturing unit in Gujarat.

According to the RHP, the company intends to utilize ₹39.03 crore for funding capex requirements for a new manufacturing unit at Mehsana.

The company will manufacture new products such as FRP Rebars and Carbon Fiber Reinforced Polymer (CFRP) products, including CFRP Core Rods, CFRP Planks for Wind Blades, CFRP Pultruded Profiles, and Moulded Parts.

The new unit will help expand manufacturing activities for existing products like FRP Moulded Gratings, FRP Rod for Optic Fibre cable etc. up to 70% to 75% of total installed capacity.

The capex will also help expand and diversify our product portfolio by increasing its product base and introducing new range of product lines.