DCX Systems Ltd IPO subscribed 69.79 times at close

DCX Systems worth Rs.500 crore, consisted of a fresh issue component of Rs400 crore and an offer for sale of Rs100 crore. The IPO saw fairly strong response on Day-1 and Day-2 of the IPO and closed with an impressive subscription at the close of Day-3. As per the combined bid details put out by the BSE at the close of Day-3, DCX Systems Ltd IPO was subscribed a hefty 69.79X overall, with best demand coming from the QIB segment followed by the retail segment and then the HNI / NII. While the retail and HNI had shown sufficient traction in the first two days itself, the response of the QIB segment gained substantial traction on the last day of the IPO i.e. 02nd November 2022.

Also Read: DCX Systems Ltd IPO gets 45% anchor allocated

As of close of 02nd November 2022, out of the 145.11 lakh shares on offer in the IPO, DCX Systems Ltd saw bids for 10,127.44 lakh shares. This implies an overall subscription of 69.79X. The granular break-up of subscriptions was in favour of the QIB investors followed by the retail investors and the HNI / NII 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, more so in the case of the QIB bidders getting bunched on the last day of the IPO.

DCX Systems Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 28th October 2022, DCX Systems Ltd did an anchor placement of 1,08,69,564 shares at the upper end of the price band of Rs.207 to 12 anchor investors raising Rs.225 crore. The list of QIB investors included a number of marquee global names like Volrado, Cohesion MK, Theleme India, Resonance Opportunities Fund and BNP Paribas Arbitrage Fund. Domestic anchor investors included HDFC Mutual Fund and Motilal Oswal Mutual Fund. 

The QIB portion (net of anchor allocation as explained above) has a quota of 81.66 lakh shares of which it has got bids for 6,885.50 lakh shares at the close of Day-3, implying a subscription ratio of 84.32X 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 DCX Systems Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 43.97X (getting applications for 1,674.14 lakh shares against the quota of 38.07 lakh shares). That is a very healthy 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 itself got oversubscribed. However, the HN portion had got a good response in the first two days itself.

Now the NII/HNI portion is reported in two parts viz. bids below Rs10 lakhs (S-HNI) and bids above Rs10 lakhs (B-HNI). The bids above the Rs10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs10 lakh bid category got subscribed just 45.44X while the below Rs10 lakh bid category (S-HNIs) got subscribed 41.05X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was subscribed a relatively healthy 61.77X at the close of Day-3, showing reasonable retail appetite. It must be noted that retail allocation is 10% in this IPO. For retail investors; out of the 25.38 lakh shares on offer, valid bids were received for 1,567.80 lakh shares, which included bids for 1,372.92 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.197-Rs.207) and has closed for subscription as of the close of Wednesday, 02nd November 2022.