Inox India (INOXCVA) IPO subscribed 61.28 times

Inox India IPO (INOXCVA) opened on 14th December 2023 and closed for subscription on 18th December 2023.  The stock of Inox India Ltd (INOXCVA) has a face value of ₹2 per share and the price band for the book building IPO has been set in the band of ₹627 to ₹660 per share. The final price will be discovered within this band through the process of book building. The IPO of Inox India Ltd (INOXCVA) will be entirely an offer for sale (OFS) with no fresh issue portion. While a fresh issue brings in fresh funds into the company, it is also EPS and equity dilutive. However, OFS is just a transfer of ownership and does not entail dilution of equity or of EPS. The offer for sale (OFS) portion of the IPO of Inox India Ltd (INOXCVA) comprises the sale of 2,21,10,955 shares (221.11 lakh shares approximately), which at the upper price band of ₹660 per share will translate into an offer for sale (OFS) size of ₹1,459.32 crore.

The OFS selling will be by the promoter shareholders and investor shareholders. Among the promoter shareholders offering shares in the OFS are Siddharth Jain (104.37 lakh shares); Pavan Kumar Jain (50 lakh shares); Nayantara Jain (50 lakh shares); and Ishita Jain (12 lakh shares). The remaining shares will be offered by the investor shareholders in OFS. Since there is no fresh issue component in the IPO, the OFS portion will also be the overall size of the IPO. Therefore, the overall Inox India IPO (INOXCVA) will comprise of the sale of 2,21,10,955 shares (221.11 lakh shares approximately), which at the upper price band of ₹660 per share translates into total IPO size of ₹1,459.32 crore. The IPO of Inox India Ltd (INOXCVA) will be listed on the NSE and the BSE on the IPO mainboard. Being entirely an offer for sale (OFS), there will be no fresh funds coming into the company from the IPO. The IPO will be lead managed by ICICI Securities, and Axis Capital. KFIN Technologies Ltd will be the registrar to the issue.

How subscriptions evolved in the IPO period

While the QIB portion and the HNI / NII portion picked up traction on the last day, the overall journey was quite rapid for the retail investors. In fact, the QIB portion got fully subscribed only on the third and final day of the IPO while the HNI / NII portion and the retail portion got fully subscribed on the first day of the IPO itself. Even the overall IPO saw subscription book filling up 2.86 times, at the close of the first day of the IPO. The IPO was kept open for a total period of 3 days and here is the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 61.28 times subscribed at the close of the third and final day of the IPO on 18th December 2023. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got just 0.04 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 0.17 to 147.80X.
   
• The HNI / NII portion got 4.60 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 13.75X to 53.20X.
   
• Retail portion got 3.72 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 8.22X to 15.29X.
   
• The overall IPO got 2.86 times subscribed at the end of the first day of the IPO. However, on last day of the IPO, overall subscription moved from 7.11X to 61.28X.

Rapid update on the overall IPO response

The IPO saw fairly strong response on the Day-1 and Day-2, with most of the action visible only on Day-3 of the IPO, as is normally the case. However, the IPO did close with relatively healthy subscription numbers at the close of Day-3. In fact, the IPO of Inox India Ltd (INOXCVA) got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, Inox India Ltd (INOXCVA) IPO was subscribed 61.28X overall, with best demand coming from the QIB segment, followed by the HNI / NII segment and the Retail segment in that order.

In fact, the institutional segment and the HNI / NII segments saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion was relatively strong, although it was fully subscribed on Day-1 of the IPO itself, but subsequent traction was slower than the others. Firstly, let us look at the details of overall allocation.

Having understood the allocation of shares across various categories, Let us look at how the subscription data played out for the IPO at an overall level and at a more granular level.

As of close of 18th December 2023, out of the 154.78 lakh shares on offer in the IPO, Inox India Ltd (INOXCVA) saw bids for 9,484.24 lakh shares. This implies an overall subscription of 61.28X overall. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors and the Retail investors in that order. 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. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Data Source: BSE

Subscription status of QIB Portion

On 13th December 2023, Inox India Ltd (INOXCVA) completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated through the process of book building. A total of 66,33,285 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹660 per share (including premium of ₹658 per share) which resulted in an overall allocation of ₹437.80 crore. The anchors absorbed 30% of the total issue size of ₹1,459.32 crore.

The QIB portion (net of anchor allocation as explained above) had a quota of 44.22 lakh shares of which it has got bids for 6,536.16 lakh shares at the close of Day-3, implying a subscription ratio of 147.80X 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 Inox India Ltd (INOXCVA) IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 53.20X (getting applications for 1,764.51 lakh shares against the quota of 33.17 lakh shares). That is a relatively strong 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 as the overall HNI / NII portion added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 56.55X while the below ₹10 lakh bid category (S-HNIs) got subscribed 46.51X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed just 15.29X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 77.39 lakh shares on offer, valid bids were received for 1,183.57 lakh shares, which included bids for 1,046.03 lakh shares at the cut-off price. The IPO is priced in the band of (₹627 to ₹660 per share) and has closed for subscription as of the close of Monday, 18th December 2023.