Digikore Studios IPO Subscribed at 281.58 times

About the Digikore Studios IPO

The IPO of Digikore Studios Ltd opened for subscription on 25th September 2023 and closed on 27th September 2023. The face value of the stock is ₹10 per share. This was a book building issue, with the IPO price band fixed in the range of ₹ 168 to ₹171 per share. It was a combination of fresh issue and offer for sale (OFS). The fresh issue portion of Digikore Studios Ltd entailed the issue of 12,60,800 shares (12.61 lakh shares approximately), which at the upper band of the IPO price band of ₹171 per share was worth ₹21.56 crore. The OFS involved the sale of 5,21,600 shares (5.22 lakh shares approximately), worth ₹8.92 crore. Hence, the total issue size of Digikore Studios Ltd will entail the issue and sale of 17,82,400 shares (17.82 lakh shares approximately), which at the upper IPO price band of ₹171 per share aggregates to a total fund raising of ₹30.48 crore.

The minimum lot size for the IPO investment will be 800 shares. Thus, retail investors can invest a minimum of ₹136,800 (800 x ₹171 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 1,600 shares and having a minimum lot value of ₹273,600. 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 Sarthi Capital Advisors Private Ltd and the registrar to the issue is Bigshare Services Private Ltd.

Final subscription status of Digikore Studios Ltd

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

As can be seen from the above table, the overall IPO of Digikore Studios Ltd got subscribed 281.58 times. The Retail portion led the stakes with 370.17 times subscription, followed by the HNI / NII portion at 362.65 times and the QIBs at 65.63 times. That is a very good response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past.

Allocation quota for various categories

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 1,78,400 shares were allocated as market maker portion to Gretex Share Broking 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.

As can be seen, from the above table, the company had allocated 4.808 lakh shares or 26.97% of the original issue size to anchor investors. The anchor allotment was done a day ahead of the IPO opening and the entire anchor allocation was spread across 3 anchor investors. The anchor allocation was done at the upper end of the price band at ₹171 per share, which includes share premium of ₹161 per share.

How subscription built up for the IPO of Digikore Studios Ltd

The oversubscription of the IPO was dominated by the Retail category followed by the HNI / NIIs and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Digikore Studios 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, even the QIB portion got fully subscribed on the first day of the IPO itself. However, all the 3 categories saw bunching of flows on the last day of the IPO. The overall IPO was also 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.  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. The basis of allotment will be finalized on 29th September 2023 while the stock is expected to be listed on 04th October 2023.