Orient Technologies IPO Anchor Allocation Hits 30% Shares

The anchor allocation for Orient Technologies Limited was made at the upper end of the price band of ₹206 per share. This includes the face value of ₹10 per share plus a share premium of ₹195 per share, taking the anchor allocation price to ₹206 per share. The anchor allotment portion ahead of the Orient Technologies Limited IPO saw the anchor bidding opening and closing on August 19, 2024, just before the IPO.

Brief on the Anchor Allocation of Orient Technologies IPO

The anchor issue of the Orient Technologies IPO witnessed strong investor interest on August 19, 2024, with approximately 30.00% of the total IPO size being taken up by anchor investors. Out of the 10,425,243 shares on offer, the anchor investors picked up 3,127,522 shares, amounting to ₹64.43 crore of the total IPO size. This significant anchor allocation was finalised at the upper end of the price band of ₹206 per share, which includes a face value of ₹10 per share and a share premium of ₹195 per share, leading to an anchor allocation price of ₹206 per share. The allocation process, which saw anchor bidding open and close on August 19, 2024, underscores the robust confidence of institutional investors in Orient Technologies Limited ahead of its IPO.

The successful anchor allocation has set a positive tone for the public offering, demonstrating strong demand and likely stable post-listing performance. The structured approach to the allocation, with a lock-in period for the shares, further solidifies this outlook. Specifically, 50% of the anchor shares will be locked until September 22, 2024, while the remaining shares will be locked until November 21, 2024. This lock-in strategy is designed to stabilise the stock's performance post-listing, ensuring no sudden flood of shares in the market, which could otherwise cause volatility.

The Orient Technologies IPO will be open to the public from August 21, 2024, to August 23, 2024, with the listing scheduled for August 28, 2024. The IPO aims to raise ₹214.76 crore, with a fresh issue of 5,825,243 shares aggregating to ₹120.00 crore and an offer for sale of 4,600,000 shares aggregating to ₹94.76 crore. The total issue size is 10,425,243 shares, with shares being offered to Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), Retail Individual Investors (RIIs), and Anchor Investors.

Retail investors can bid for a minimum lot size of 72 shares, translating to a minimum investment of ₹14,832. The IPO is structured to offer diverse investors an opportunity to participate, with specific allotments for QIBs, NIIs, and retail investors. The strong response from anchor investors suggests that Orient Technologies Limited has successfully captured the interest of institutional players, which bodes well for the broader subscription phases.
 

Finer Points of the Anchor Allocation Process

It's important to comprehend the anchor placement procedure before delving into Orient Technologies anchor allotment specifics. Setting the stage for investor confidence before to an IPO or FPO is known as anchor placement. Although shorter than a pre-IPO placement, anchor allocation has a lock-in term. While anchor investors typically have a one-month lock-in period, new regulations require that a portion of the anchor allotment be locked in for three months. This step aims to reassure ordinary investors by demonstrating the support of major, well-established institutions for the issuance. The IPO gains a great deal of credibility from the participation of institutional investors like mutual funds and foreign portfolio investors (FPIs).

However, anchor investors cannot receive shares at a price lower than the IPO. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, stipulate that the Anchor investors must pay the difference by the pay-in as outlined in the revised CAN if the Offer Price discovered through the book-building process is higher than the Anchor Investor Allocation Price. The SEBI updated regulations indicate this.

When an IPO is made available to the general public after meeting SEBI eligibility, an anchor investor is usually a qualified institutional buyer (QIB), such as a sovereign fund, mutual fund, or overseas portfolio investor. Because the anchor portion is a part of the public issue, the IPO portion to the public (QIB portion) is lowered to that extent. The earliest investors, or these anchors, instil confidence in investors and increase the process's allure. Furthermore, anchor investors are important players in the price discovery process of the IPO.
 

Anchor Allocation Investors in Orient Technologies IPO

On August 19, 2024, Orient Technologies Limited completed its anchor allocation, receiving an encouraging response from institutional investors. The anchor investors, typically major financial institutions, actively participated in the bidding process, signalling their strong confidence in the company's prospects. 3,127,522 shares were allocated to anchor investors at the upper price band of ₹206 per share, culminating in a total allocation amounting to ₹64.43 crore. This robust participation highlights investors' significant interest and trust in Orient Technologies ahead of its IPO.
 

The anchor investors absorbed 30% of the total issue size, marking a critical milestone in the IPO process. Such strong institutional interest often sets a positive tone for the subsequent phases of the IPO, including the retail and non-institutional investor segments. These institutional players, including mutual funds, foreign institutional investors (FIIs), and insurance companies, endorse the anchor allocation. Their involvement is a clear indicator of a favourable outlook on the company’s growth trajectory and potential in the market.

Usually, the names of anchor investors and their allotments are made public after the allocation, but this anchor investment's importance is already apparent. Insurance companies, mutual funds, and foreign institutional investors (FIIs) are common examples of these anchor investors, who are significant institutional players. Their participation typically reflects optimism about the company's future, which may impact the IPO's overall performance.
 

The above list represents the key anchor investors allotted shares as part of the Orient Technologies Limited IPO. This structured and substantial allocation signifies a robust endorsement from leading institutional players, setting a solid foundation for the IPO. The lock-in periods and allocation details are indicative of a strong institutional appetite, which is likely to have a positive ripple effect on subsequent subscriptions. The comprehensive report can be accessed on the BSE website for a detailed breakdown of the mutual fund allocations.

The strong participation from anchor investors usually bodes well for the IPO's retail segment; in this case, the anchor response has been particularly robust. The allocation to anchor investors highlights significant interest from domestic and international institutional investors, laying the groundwork for a successful IPO listing. The participation of large funds such as Pine Oak Global Fund and Saint Capital Fund showcases the confidence these institutions have in Orient Technologies' growth potential. The market awaits the IPO opening, expecting strong demand across all investor categories.

Key Dates for Orient Technologies IPO and How to Apply

• IPO Open Date: August 21, 2024
• IPO Close Date: August 23, 2024
• Allotment Date: August 26, 2024
• Listing Date: August 28, 2024

The book-built IPO of Orient Technologies is valued at ₹ 214.76 crores. The issue consists of an offer to sell 0.46 crore shares, valued at ₹ 94.76 crores, and a fresh issue of 0.58 crore shares, totalling ₹ 120.00 crores.

The pricing range for Orient Technologies' IPO is ₹195 to ₹206 per share. Applications must have a minimum lot size of 72 shares. Retail investors are required to invest a minimum of ₹14,832. For both sNII and bNII, the minimum lot size investment is ₹207,648 for 14 lots (1,008 shares) and ₹1,008,576 for 68 lots (4,896 shares).

Book-running Lead Manager: Elara Capital (India) Private Limited

Registrar: Link Intime India Private Ltd

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