M.V.K. Agro Food Product IPO Allotment Status

Building blocks of the M.V.K. Agro Food Product Ltd IPO

The stock of M.V.K. Agro Food Product Ltd has a face value of ₹10 per share and it is a fixed price issue. The price for the book building issue is set at ₹120 per share. Being a fixed price IPO, the question of price discovery does not arise in this case. The M.V.K. Agro Food Product IPO has only a fresh issue component and no offer for sale (OFS) portion. It must be remembered that the fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership and  hence it is not EPS or equity dilutive. As part of the fresh issue portion of the IPO, M.V.K. Agro Food Product Ltd will issue a total of 54,90,000 shares (54.90 lakh shares), which at the upper band of IPO price of ₹120 per share aggregates to fresh fund raising of ₹65.88 crore. Since there is no offer for sale (OFS) portion, the fresh issue size will also double up as the overall IPO size. 

Therefore, the overall IPO size will also comprise of the issue of 54,90,000 shares (54.90 lakh shares) which at the upper band IPO price of ₹120 per share will aggregate to overall IPO size of ₹65.88 crore. This issue has a market making portion with a market maker inventory allocation of 2,74,800 shares. Nikunj Stock Brokers 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.

The promoter stake stands at 100.00% but post the IPO it will dilute to 64.56%. The fresh issue funds will be used by the company for setting up a greenfield unit in Nanded in Maharashtra for the manufacture of ethanol and the generation & bottling of bio-CNG and fertilizers. Horizon Management Private Ltd will be the lead manager to the issue, and MAS Services Ltd will be the registrar to the issue. The market maker for the issue is Nikunj Stock Brokers Ltd.

Checking allotment status of M.V.K. Agro Food Product Ltd IPO

Since this is an NSE SME IPO, there is no facility to check on the exchange website and BSE only offers allotment status for the mainboard IPOs and for BSE SME IPOs. If you have applied for the IPO, you can check your allotment status only on the website of the IPO registrar, MAS Services India Ltd. Alternatively, if your broker provides you a link to access the allotment status, you can do the same. Here are the steps that you need to follow to check allotment status on the website of the IPO registrar, MAS Services Ltd. The same can typically checked once the basis of allotment is finalized in this case, which will be late on 05th March 2024.

Checking the allotment status on MAS Services (Registrar to IPO)

Visit the MAS Services registrar website for checking the IPO allotment status by clicking on the link below:

https://www.masserv.com/opt.asp

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 MAS Services Ltd by clicking on the IPO Allotment Status link displayed prominently on the home page. It all works the same.

Once you go to the main allotment status page of MAS Services the investors have 2 options. They can either query for the IPO allotment status based on the Application Number or on the basis of a combination of DP ID and Client ID.

Here is how you can go about both these options.

• To Query by Application Number, click on the “Search on Application No.” hyperlink. This will take you to a fresh page with a box provided to input the application number. Here is what needs to be done.

        ◦ Enter the Application Number as it is
        ◦ Enter the 6-digit Captcha Code
        ◦ Click on Submit button
        ◦ Allotment Status gets displayed on screen showing number of shares allotted

• To Query by DP-ID, click on the “Search on DP-id/Client id” hyperlink. This will take you to a fresh page with 2 boxes provided to input the DP ID and the Client ID in that order. Here is what needs to be done.

        ◦ Enter the DP-ID
        ◦ Enter the Client-ID
        ◦ Enter the 6-digit Captcha Code
        ◦ Click on Submit button
        ◦ Allotment Status gets displayed on screen showing number of shares allotted

MAS Services Ltd offers you the facility to toggle between the two search options of application number and DP id, without going back to the main page. It is a good idea to take  a screenshot of the final output for your records and also for reconciliation with the demat account on the demat allotment date.

There are some basic rules to remember here. The basis of allotment is being finalized on 05th March 2024, so the investors would be able to access the online allotment status facility, either late on 05th March 2024 or by the middle of 06th March 2024. Once you get the online output, you can save a screenshot of the same, so that the same can be later reconciled with the demat credit on 06th March 2024 or later. It would appear on the demat account with ISIN Number (INE0SGC01015)

How allocation quota and subscription impact basis of allotment?

Here is a quick look at how the allocation was made across different categories of investors in the IPO of M.V.K. Agro Food Product Ltd at the close of the IPO on 04th March 2024.

The response to the IPO of M.V.K. Agro Food Product Ltd was rather modest and it was subscribed 8.46X overall at the close of bidding on 04th March 2024 with the retail segment seeing 13.01 times subscription and the non-retail or HNI / NII portion seeing 3.90 times subscription.

However, the sweepstakes were led surprisingly by the Retail portion which was subscribed a full 13.01 times. The table below captures the overall allocation of shares with the oversubscription details as of the close of the IPO on 04th March 2024. Normally, higher the subscription levels, the lower are the chances of allotment.

To sum it up, the oversubscription is quite modest, so the chances of allotment in the IPO would be relatively higher. This applies to the retail portion and also to the HNI / NII portion; as the subscription is very modest in both the categories. 

Next steps in the IPO of M.V.K. Agro Food Product Ltd

With the IPO of M.V.K. Agro Food Product Ltd closed for subscription at the end of 04th March 2024, the next piece of action shifts to the finalization of the basis of allotment and later to the listing of the IPO. The basis of allotment will be finalized on 05th March 2024 while the refunds would be initiated on 06th March 2024. The shares of M.V.K. Agro Food Product Ltd (ISIN - INE0SGC01015) would be credited to the demat accounts of eligible shareholders by the close of 06th March 2024 while the stock of M.V.K. Agro Food Product Ltd is expected to be listed on 07th March 2024. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.

Investors would do well to remember that the level of subscription is very material as it determines the chances of getting allotment. Normally, higher the subscription ratio, lower the chances of allotment and vice versa. In this case, the subscription levels have been very modest in the IPO; both in the Retail segment and also in the HNI / NII segment. Investors in the IPO need to assess their chances of allotment accordingly. The final status will be known once the basis of allotment is finalized and uploaded for you to check. You can apply the above allotment checking process flow after the basis of allotment is finalized.