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One stock that had high enthusiasm for its IPO but absolutely failed investors’ expectations post-listing is IdeaForge Technology Ltd (NS:) Limited. It marked a stellar listing gain of 94.2% and was one of the highest subscribed IPOs of 2023 with a subscription of 106.1x.
However, the stock has only been facing severe liquidation from investors’ portfolios since its debut. From the listing day’s high of INR 1,343.9, the stock is now down to INR 808, a decent 39% cut in 4 months.
Image Description: Daily chart of IdeaForge Technologies with volume bars at the bottom
Image Source: Investing.com
The company is primarily in the business of drone manufacturing and has a market capitalization of INR 3,336 crore. It is showing massive growth and clocked a revenue of INR 1,96.41 crore in FY23, from a mere INR 16.32 crore in FY20. Also, it managed to turn a loss of INR 13.45 crore into a profit of INR 31.99 crore in the same period. The sector itself is one of the fastest growing and the company sure has an early-mover advantage, however, the P/E ratio of 107 seems to be a worrying factor for investors.
After plunging almost 40%, the stock is now taking a breather and has been consolidating for some time. This can be an accumulation phase wherein astute investors might be finding some value in the stock and therefore high demand has finally been able to cope with supply, resulting in halting the downtrend.
Technically, the stock can give a breakout from this consolidation phase and if that happens, investors might see a level of INR 960 in the near future. Although the trend is still not healthy to go long, the risk-to-reward ratio is quite lucrative for contra traders.
X (formerly, Twitter) – aayushxkhanna
Read More: Trendline Breakout: Stock Gears up to Rally from 52-Week Low!
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