Esconet Technologies IPO Allotment Status

About the Esconet Technologies Ltd IPO

The stock of Esconet Technologies Ltd has a face value of ₹10 per share and it is a book building issue. The price for the book building issue is set in the price band of ₹80 to ₹84 per share. Being a book built issue, the price will be discovered in the above band. The Esconet Technologies IPO has only a fresh issue component and no offer for sale (OFS) component in the IPO. As part of the fresh issue portion of the IPO, Esconet Technologies Ltd will issue a total of 33,60,000 shares (33.60 lakh shares), which at the upper band of IPO price of ₹84 per share aggregates to fresh fund raising of ₹28.22 crore. Since there is no offer for sale (OFS) portion, the fresh issue size will also double up as the overall IPO size. Therefore, overall IPO size will comprise of the issue of 33,60,000 shares (33.60 lakh shares) which at the upper band of ₹84 per share will aggregate to overall IPO size of ₹28.22 crore. 

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 1,76,000 shares. SS Corporate Securities Ltd will be the market maker to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs, post listing. Post the IPO, the promoter stake in the company will get diluted from 89.18% to 64.94%. The fresh issue funds will be used by the company to fund the capex of its subsidiary, ZeaCloud Services Private Ltd and for its own working capital funding purposes. Corporate Capital Ventures Private Ltd will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue.

When and how to check IPO allotment status online?

The issue opened for subscription on 16th February 2024 and closed for subscription on 20th February 2024 (both days inclusive). The basis of allotment will be finalized on 21st February 2024 and the refunds will be initiated on 22nd February 2024. In addition, the demat credits are expected to also happen on 22nd February 2024 and the stock is scheduled to list on 23rd February 2024 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The demat credits to the demat account to the extent of allotment will happen by the close of 22nd February 2024 under ISIN Number (INE0RQZ01017).

Since this is an NSE SME IPO, there is no facility to check on the exchange website and BSE only offers allotment status in the case of mainboard IPOs and for BSE SME IPOs. If you have applied for the IPO, you can check your allotment status online on the website of the IPO registrar, Skyline Financial Services Private Ltd. Here are the steps that you need to follow to check allotment status.

Checking the allotment status on the website of Skyline Financial Services Pvt Ltd (Registrar to IPO)

https://www.skylinerta.com/ipo.php

There are three things to remember. Firstly, you can just click on the hyper link given above and directly go to the allotment checking page. The second option, in case you are not able to click on the link, is to copy the link and paste in your web browser. Thirdly, there also a way to access this page via the home page of Skyline Financial Services Private Ltd by clicking on the Public Issues link displayed prominently on the home page. It all works the same.

The first thing you do is to select the company you want to access the allotment status for. The drop down box will only show companies where the allotment status is already finalized. In this case, you can get to see the name of Esconet Technologies Ltd on the list around 21st February 2024 when the allotment status and the basis of allotment by the issuer is finalized. Once the company name appears on the drop down, you can click on the company name and go to next screen.

This dropdown will only show the active IPOs, so once the allotment status is finalized, you can select Esconet Technologies Ltd from the dropdown box. The allotment status will be finalized on 21st February 2024, so in this case, you can access the details on the registrar website either late on 21st February 2024 or by middle of 22nd February 2024. Once the company is selected from the dropdown box, you have 3 methods to check the allotment status for the IPO. Any of the three options can be selected from the same screen by opting for the preferred radio button.    

• Firstly, you can search by Beneficiary ID of your demat account. From the page you just need to first select the DP ID / Client ID option. It does not matter whether it is an NSDL account or a CDSL account. All you need to do is to write down the combination of the DP ID and the Client ID in a single string. In the case of NSDL, enter the DP id and Client id in a single string without space. In case of CDSL, just enter the CDSL client number. Remember that the NSDL string is alphanumeric while the CDSL string is a numeric string. The details of your DP and client ID are available in your online DP statement or in the statement of account. After that you can click the Search Button in either cases.

• Secondly, you can access with Application Number / CAF (Composite Application Form) Number. Enter the Application / CAF number and then click on Search Button. Enter the application exactly it is given in the acknowledgement slip given to you post the IPO application process. After that you can click on the Search button to get the details of shares allotted to you in the IPO.

• Thirdly, you can also search by Income Tax PAN number. Once you select PAN (permanent account number) from the dropdown menu, enter your 10-digit PAN number, which is an alphanumeric code. The PAN number will be available on your PAN card or on top of your income tax returns filed. Once you enter the PAN, click on the Search Button.

The IPO status with number of shares of Esconet Technologies Ltd allotted will be displayed on the screen. You can save a screenshot of the digital output for future reference. Once again, you can verify the demat credit by the close of 22nd February 2024 or after that. Remember that the most important factor in assessing your chances of getting allotment is the quota allocation for each category and the extent of oversubscription in the IPO. Normally, higher the oversubscription in the IPO, the lower are your chances of getting an allotment. Now, let us look at the quotas allocated to each category and also the extent of oversubscription that the IPO of Esconet Technologies Ltd got.

Quota allocation and subscription response to the IPO of Esconet Technologies Ltd

The issue is split into retail, QIB and the HNI / NII portion. The anchor allotment portion is normally carved out of the QIB portion and that was the case in this IPO also. In addition, the market maker quota is to provide the market maker the necessary inventory to be able to support prices post listing and ensure narrow trading spreads. The break-down of the reservation for  different categories of investors is as under.

The response to the IPO of Esconet Technologies Ltd was very strong and robust as the overall issue was subscribed 507.24X at the close of bidding on 20th February 2024 which is sharply better than the comparable median subscription that the NSE SME IPOs have been getting in general. Out of the overall bids received, the retail segment saw 553.02 times subscription and the non-retail HNI / NII portion saw 868.05 times subscription. The QIB portion in the IPO of Esconet Technologies Ltd also saw healthy subscription at 156.02X. The table below captures the overall allocation of shares with the oversubscription details as of the close of the IPO on 20th February 2024.

What do we read from the above data? Clearly, the oversubscription to the IPO is very robust and high so the chances of getting allotment in the IPO is relatively lower for the investors in the IPO. Investors need to factor this oversubscription into their calculations since the probability of getting allotment is inversely proportional to the subscription levels. However, it is best to wait till 21st February 2024 when the basis of allotment will be finalized for the IPO of Esconet Technologies Ltd. Post that, the status of allotment can be checked online based on the methodology explained above.

The demat credits to the demat account to the extent of allotment will happen by the close of 22nd February 2024 under ISIN Number (INE0RQZ01017). The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space. It will commence trading on the BE segment or trade to trade segment of the NSE SME segment.