Chavda Infra IPO Final Subscription Status

Chavda Infra IPO closed on Thursday, 14th September 2023. The IPO had opened for subscription on 12th September 2023. Let us look at the final subscription status of Chavda Infra Ltd at the close of subscription on 04th August 2023. The price band for the IPO was fixed at ₹60 to ₹65 and the stock has a face value of ₹10 per share.

About the Chavda Infra IPO

The ₹43.26 crore IPO of Chavda Infra Ltd comprises entirely of a fresh issue with no offer for sale (OFS) component. The Fresh Issue portion of Chavda Infra Ltd entails the issue of 66.56 lakh shares which at the upper band of the price range at ₹65 per share aggregates to ₹43.26 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 2,000 share each. Thus, the minimum investment of ₹130,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs / NIIs can invest in a minimum of 2 lots of 4,000 shares worth ₹260,000 as the bare minimum investment. There is no upper limit for the HNI / NII category or even for the QIB category. Post the IPO, the promoter equity in the company will get diluted from 100% to 73%. The issue is lead managed by Beeline Capital Advisors Private Ltd, while KFIN Technologies Ltd will be the registrars to the issue. Let us now turn to the final subscription details of the IPO as of the close of subscription on 14th September 2023.

Chavda Infra IPO Final Subscription Status

Here is the subscription status of the Chavda Infra IPO as at close on 14-Sep-2023.

The issue was open for retail investors, QIBs and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the QIBs, the retail and the HNI NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 3,36,000 shares were allocated as market maker portion to Spread X Securities Ltd, 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.

How the anchor allocation for Chavda Infra Ltd looked like?

As can be seen, from the above table, the company had allocated 28.49% of its original issue size to anchor investors. The anchor allotment was done on 11th September 2023 and details and the anchor allocation was spread across 7 anchor investors. All the anchor allocation was done at the upper end of the price band at ₹65 per share. Overall, a total of 18.96 lakh shares were allocated to anchor investors worth ₹12.32 crore. Here are the details of the anchor allocation for anchor investors of Chavda Infra Ltd.

• NAV Capital Emerging Star Fund allotted 5.12 lakh shares 27.00%) worth ₹3.33 crore
• Morgan Stanley Capital Asia allotted 4.60 lakh shares (24.26%) worth ₹2.99 crore
• Rajasthan Global Securities allotted 3.08 lakh shares (16.24%) worth ₹2.00 crore
• LRSD Securities Private Ltd allotted 1.54 lakh shares (8.12%) worth ₹1.00 crore
• Neomile Growth Fund allotted 1.54 lakh shares (8.12%) worth ₹1.00 crore
• Moneywise Financial Services allotted 1.54 lakh shares (8.12%) worth ₹1.00 crore
• Acintyo Investment Fund allotted 1.54 lakh shares (8.12%) worth ₹1.00 crore

The anchor portion is adjusted to the overall QIB quota.

How subscription built up for the Chavda Infra IPO

The oversubscription of the IPO was dominated by the HNI / NIIs followed by the retail investors and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Chavda Infra Ltd IPO.

It is clear from the above table that while the retail portion and the HNI / NII portion got fully subscribed on the first day of the IPO itself, the QIB portion also got fully subscribed on the first day. That is rather surprising as the QIB portion normally gets subscribed only on the second or third day. The overall IPO was, obviously, fully subscribed on the first day itself although most of the traction was seen on the last day. All the 3 categories of investors viz., HNIs / NIIs, retail and QIB categories saw good traction and build up of interest on the last day of the IPO. There is an allocation of 3,36,000 shares to Spread X Securities Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

The IPO of Chavda Infra Ltd opened for subscription on 12th September 2023 and closed for subscription on 14th September 2023 (both days inclusive). The basis of allotment will be finalized on 20th September 2023 and the refunds will be initiated on 21st September 2023. In addition, the demat credits are expected to happen on 22nd September 2023 and the stock is scheduled to list on 25th September 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.

A quick word on Chavda Infra Ltd and the SME IPO

Chavda Infra Ltd was incorporated in 2012 to provide construction and allied services. It provides these services across the gamut of residential, commercial, and institutional projects in the state of Gujarat. The group is broadly active in the cities of Ahmedabad, Gandhinagar, and Rajkot. The group, overall, operates under 3 verticals viz. Chavda Infra, Chavda RMC and Chavda Developers. It has already developed and delivered more than 100 projects in Gujarat spread across residential, commercial, and institutional properties. It offers the full gamut services ranging from planning, design, construction, and post-construction activities. Chavda Infra is divided into 3 business lines, which include contracting services, development services and commercial renting services.

Some of the popular and reputed projects completed by Chavda Infra in Ahmedabad include Straft Luxuria, Shivalik Parkview, Shivalik Sharda Harmony among key residential projects. Among commercial properties developed, they include AAA Corporate House, Sadbhav House, Solitaire Sky, Sandesh Press, Suyash Solitaire and Solitaire Connect. Some of its premium projects include the Nirma University (old building), Zydus School and AIS Toddlers Den. It currently has about 26 ongoing projects at various stages of completion with a combined value of over ₹600 crore. These 26 projects include 4 commercial property projects, 4 institutional infrastructure projects and 18 residential projects. The total employee strength of Chavda Infra Ltd stands at 250.

The company has been promoted by Mahesh Chavda, Dharmishta Chavda and Johil Chavda. The promoter holding (including the promoter group) in the company currently stands at 100%. However, post the fresh issue of shares and the IPO, the promoter equity holding share will reduce to 73%. The fresh issue funds will be used by the company for filling its working capital funding gaps and also for general corporate purposes. Part of the funds raised will also go towards meeting issue expenses. While Beeline Capital Advisors Private Ltd will be the lead manager to the issue, KFIN Technologies Ltd will be the registrar to the issue. The market maker for the issue is Spread X Securities Ltd.