Arabian Petroleum IPO Subscribed at 19.91 times

About the Arabian Petroleum IPO

Arabian Petroleum IPO opened on 25th September 2023 and closed for subscription on 27th September 2023. The company has a face value of ₹10 per share and it is a fixed price issue, with the IPO price at ₹70 per share. As part of the fresh issue portion of the IPO, Arabian Petroleum Ltd will issue 28,92,000 shares (28.92 lakh shares). At the IPO fixed price of ₹70 per share, the fresh issue portion aggregates to ₹20.24 crore. Since there is no offer for sale portion, the total issue size of Arabian Petroleum Ltd will also entail the issue of 28,92,000 shares (28.92 lakh shares). At the fixed IPO price of ₹70 per share, the total size of the IPO of Arabian Petroleum Ltd will be worth ₹20.24 crore.

The minimum lot size for the IPO investment will be 2,000 shares. Thus, retail investors can invest a minimum of ₹140,000 (2,000 x ₹70 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 4,000 shares and having a minimum lot value of ₹280,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The issue is lead managed by Hem Securities Ltd, while Purva Share Registry India Private Ltd will be the registrars to the issue.

Final subscription status of Arabian Petroleum IPO

Here is the subscription status of the Arabian Petroleum IPO as at close on 27th September 2023.

The issue was open for retail investors and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the retail and the HNI NII. A total of 1,48,000 shares were allocated as market maker portion to Hem Finlease, which will act as a market maker to provide bid-ask liquidity on the counter post listing. Market maker action not only improves liquidity in the counter but also reduces the basis risk. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

As can be seen, from the above table, the company had no QIB quota and has not allocated any shares for the anchor portion. However, there is an allocation of 1,48,000 shares for the market maker and the net offer size (net of market maker allocation) is distributed among the retail and the HNI / NII investors as above.

How subscription built up for the IPO of Arabian Petroleum Ltd

The oversubscription of the IPO was dominated by the Retail Investors followed by the HNI / NII investors in that order. The table below captures the day-wise progression of the subscription status of Arabian Petroleum Ltd IPO.

It is clear from the above table that while the HNI / NII portion got fully subscribed on the first day of the IPO itself, the retail portion got fully subscribed only on the second day. However, the overall IPO was fully subscribed on the first day itself although most of the traction was seen on the last day. Both the categories of investors viz., HNIs / NIIs and retail saw good traction and build up of interest on the last day of the IPO.  Post the IPO listing, the market maker will offer two way quotes on the stock, using the inventory of shares, and ensure that investors do not have to worry about liquidity and basis risk.