ECO Mobility IPO: Anchor Allocation at 30.00%

About ECO Mobility IPO

ECO Mobility IPO is a book-built issue of ₹601.20 crores. The issue is entirely an offer for sale of 1.8 crore shares. The IPO opens for subscription on 28th August 2024 and closes on 30th August 2024. The allotment for the ECO Mobility IPO is expected to be finalised on Monday, 2nd September 2024. ECO Mobility IPO will be listed on BSE and NSE, with a tentative listing date fixed as Wednesday, 4th September 2024.

The entire anchor allocation was made at the upper end of the price band of ₹334 per share. This includes the face value of ₹2 per share plus a share premium of ₹332 per share, taking the anchor allocation price to ₹334 per share. Let us focus on the anchor allotment portion ahead of the ECO Mobility IPO, which saw the anchor bidding opening and closing on 27th August 2024. 

Read more about ECO Mobility IPO

A brief on the Anchor Allocation of ECO Mobility IPO

The anchor issue of ECO Mobility IPO saw a strong response on 27th August 2024, with 30% of the IPO size getting absorbed by the anchors. Out of 18,000,000 shares on offer, the anchors picked up 5,400,000 shares, accounting for 30% of the total IPO size. The anchor placement reporting was made to the BSE late on Monday, 27th August 2024, one working day ahead of the IPO opening on Tuesday, 28th August 2024.

The entire anchor allocation was made at the upper end of the price band of ₹334 per share. This includes the face value of ₹2 per share plus a share premium of ₹332 per share, taking the anchor allocation price to ₹334 per share. Let us focus on the anchor allotment portion ahead of the ECO Mobility IPO, which saw the anchor bidding open and close on 27th August 2024. After the anchor allocation, here is how the overall allocation looked.

Here, it must be noted that the 5,400,000 shares allocated to the anchor investors on 27th August 2024 were reduced from the original QIB quota, and only the residual amount would be available to QIBs in the IPO. That change has been reflected in the table above, with the QIB IPO portion reduced to the extent of the anchor allocation. As a result, the QIB quota has reduced from 50% before the anchor allocation to 20% after the anchor allocation. The overall allocation to QIBs includes the anchor portion, so the allotted anchor shares have been deducted from the QIB quota for the public issue.

Finer points of the Anchor Allocation Process

Before we go into the details of the actual anchor allotment, a quick word on the process of anchor placement. The anchor placement ahead of an IPO/FPO differs from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although, under the new rules, part of the anchor portion will be locked in for 3 months. It just gives investors confidence that large, established institutions back the issue. The presence of institutional investors like mutual funds and foreign portfolio investors (FPIs) gives confidence to retail investors. Here are details of the anchor lock-in for the ECO Mobility issue.

However, the anchor investors cannot be allotted shares at a discount to the IPO price. This is explicitly stated in the SEBI revised regulations: "As per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, in case the Offer Price discovered through the book-building process is higher than the Anchor Investor Allocation Price, then the Anchor investors will be required to pay the difference by the pay-in as specified in the revised CAN.

An anchor investor in an IPO is normally a qualified institutional buyer (QIB), like a foreign portfolio investor mutual fund, insurance company, or sovereign fund, which invests before the IPO is made available to the public as per SEBI regulations. The anchor portion is part of the public issue, so the IPO portion to the public (QIB portion) is reduced to that extent. As initial investors, these anchors make the IPO process more attractive for investors and instil confidence in them. Anchor investors also largely aid in the price discovery of the IPO.

Anchor Allocation investors in ECO Mobility IPO

On 27th August 2024, ECO Mobility IPO completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated in the book-building process. A total of 54,00,000 shares were allotted to anchor investors. The allocation was done at the upper IPO price band of ₹334 per share (including a premium of ₹332 per share), resulting in an overall anchor allocation of ₹180.36 crore.

The anchors have absorbed 30% of the total issue size of ₹601.20 crore, indicating strong institutional demand. Listed below are the 19 anchor investors who have been allotted shares in the anchor allocation before ECO Mobility IPO. The entire anchor allocation of ₹180.36 crore was spread across these 19 major anchor investors. The detailed allocation is captured in the table below. 

Source: BSE

The above list includes all 19 anchor investors who were allotted shares in the anchor portions ahead of the ECO Mobility IPO. The detailed and comprehensive report on the anchor allocation can be accessed on the BSE website.
Out of the allocation of 54,00,000 Equity Shares to the Anchor Investors, 35,13,500 Equity Shares (i.e., 65.06% of the total allocation to Anchor Investors) were allotted to 10 domestic mutual funds who have applied through a total of 15 schemes. This significant allocation to domestic mutual funds indicates strong confidence in the company from institutional investors.

The anchor response normally sets the tone for retail participation in the IPO, and the anchor response has been very strong in this case. The substantial participation from a diverse set of investors, including domestic mutual funds, foreign funds, and other institutional investors, suggests a positive outlook for the ECO Mobility IPO.

Key dates for ECO Mobility IPO and How to Apply?

The issue opens for subscription on 28th August 2024 and closes for subscription on 30th August 2024 (both days inclusive). The basis of allotment will be finalized on 2nd September 2024 and the refunds will be initiated on 3rd September 2024. In addition, the demat credits are expected to happen on 3rd September 2024, and the stock will list on 4th September 2024 on the NSE and the BSE. ECO Mobility will test the appetite for specialised mobility service providers in the Indian market.

The issue is entirely an offer for the sale of 18,000,000 shares aggregating to ₹601.20 crore. The price band is set at ₹318 to ₹334 per share. The minimum lot size for an application is 44 Shares. The minimum amount of investment required by retail investors is ₹14,696. The minimum lot size investment for small NIIs is 14 lots (616 shares), amounting to ₹205,744, and for big NIIs, it is 69 lots (3,036 shares), amounting to ₹1,014,024.

Equirus Capital Private Limited and IIFL Securities Ltd are the book-running lead managers of the ECO Mobility IPO, while Link Intime India Private Ltd is the registrar for the issue.