Kaynes Technology IPO subscribed 34.16 times at close

Kaynes Technology IPO worth Rs.857.82 crore, consisted of a fresh issue of Rs530 crore and an offer for sale (OFS) of Rs327.82 crore. The fresh issue infuses fresh funds into the company while it is also equity dilutive and EPS dilutive. The IPO saw fairly steady response on Day-1 and Day-2 of the IPO and closed with rather healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed well before the close of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Kaynes Technology India Ltd IPO was subscribed at 34.16X overall, with best demand coming from the QIB segment, followed by the HNI / NII segment and the retail segment in that order. In fact, only the institutional segment saw tremendous traction on the last day. The HNI portion did do well but there was no surge of funding applications coming on the last day of the IPO.

As of close of 14th November 2022, out of the 104.70 lakh shares on offer in the IPO, Kaynes Technology India Ltd saw bids for 3,576.23 lakh shares. This implies an overall subscription of 34.16X. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion got the lowest subscription among the various categories. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. However, the NII bids picked limited momentum even on the last day with most of the action concentrated in the QIB segment.

Kaynes Technology India Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 09th November 2022, Kaynes Technology India Ltd did an anchor placement of 43,76,421 shares at the upper end of the price band of Rs.587 to 28 anchor investors raising Rs.256.90 crore. The list of QIB investors included a number of marquee global names like Volrado Partners, Nomura Trust, Goldman Sachs, Eastspring Investments, Malabar India Fund, Norwegian Pension Fund, Carmignac Portfolio, Cohesion MK Best Ideas etc; apart from a host of Indian mutual fund and insurance companies.

The QIB portion (net of anchor allocation as explained above) has a quota of 29.24 lakh shares of which it has got bids for 2,879.19 lakh shares at the close of Day-3, implying a subscription ratio of 98.47X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Kaynes Technology India Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 21.21X (getting applications for 478.37 lakh shares against the quota of 22.56 lakh shares). That is a rather encouraging response at the close of Day-3 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was visible only to some extent in overall HNI / NII portion. However, the HNI portion did manage to sail through quite comfortably with reasonable oversubscription.

Now the NII/HNI portion is reported in two parts viz. bids below Rs10 lakhs (S-HNI) and bids above Rs10 lakhs (B-HNI). The bids above the Rs10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs10 lakh bid category (B-HNIs) got subscribed 23.07X while the below Rs10 lakh bid category (S-HNIs) got subscribed 17.47X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was subscribed 4.09X at the close of Day-3, showing steady retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 52.64 lakh shares on offer, valid bids were received for only 215.49 lakh shares, which included bids for 173.87 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.559-Rs.587) and has closed for subscription as of the close of Monday, 14th November 2022.