Exicom Tele-Systems IPO Subscribed 129.54 times

About the Exicom Tele-Systems IPO

The IPO of Exicom Tele-Systems IPO will be open from February 27th, 2024 to February 29th, 2024; both days inclusive. The stock of Exicom Tele-Systems Ltd has a face value of ₹10 per share and the price band for the book building IPO has been set in the range of ₹135 to ₹142 per share. Exicom Tele-Systems IPO will be a combination of fresh issue of shares and an offer for sale (OFS) component in the IPO. The fresh issue tends to bring in fresh funds into the company, but is also EPS and equity dilutive. On the other hand, OFS is just a transfer of ownership. The fresh issue portion of the IPO of Exicom Tele-Systems Ltd comprises the issue of 2,31,69,014 shares (231.69 lakh shares approximately), which at the upper price band of ₹142 per share will translate into a fresh issue size of ₹329 crore.

The offer for sale (OFS) portion of the Exicom Tele-Systems IPO comprises the sale of 70,42,200 shares (70.42 lakh shares approximately), which at the upper price band of ₹142 per share will translate into an OFS size of ₹100 crore. The entire OFS of 70,42,200 shares worth ₹100 crore will be sold by NextWave Communications Private Ltd, one of the promoter group companies. This will reduce the promoter holding to the extent. Thus, overall IPO of Exicom Tele-Systems Ltd will comprise of the issue and sale of 3,02,11,214 shares (302.11 lakh shares approximately) which at the upper end of the price band of ₹142 per share aggregates to total issue size of ₹429 crore. The IPO of Exicom Tele-Systems Ltd will be listed on the NSE and the BSE on the IPO mainboard. These details typically go through minor changes at the time of the final issue.

The fresh funds will be used to part finance the cost of its assembly line in Telangana, repayment of debt, funding working capital gaps and also to invest in R&D. Promoters currently hold 93.28% in the company, which will get diluted post the IPO to 69.56%. The IPO will be lead managed by Monarch Networth Capital Ltd, Unistone Capital Private Ltd, and Systematic Corporate Services Ltd. For the IPO of Exicom Tele-Systems Ltd; Link Intime India Private Ltd will be the registrar.

How subscriptions evolved in the IPO period

While the QIB portion and the HNI / NII portion picked up traction on the last day, the overall journey was quite rapid for the retail investors also. In fact, the QIB portion got just about fully subscribed on the second day of the IPO while the retail portion and the HNI portion got comfortably fully subscribed on the first day of the IPO itself. The overall IPO also saw the subscription book filling up on the first day of the IPO itself. The IPO was kept open for a total period of 3 consecutive trading days. While the retail portion did start off strong, the eventual traction was also very strong; next to the HNI / NII portion and the QIB portion respectively. Here is the day-wise progress in IPO subscription of the total available quota. The available QIB quota in the table below represents the oversubscription; is net of the anchor allocation of shares, done one working day prior to the opening of the IPO.

As can be seen from the above table, the overall IPO got 129.54 times subscribed at the close of the third and final day of the IPO on 29th February 2024. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got 0.84 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 5.13X to 121.80X.
   
• The HNI / NII portion got 19.98 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 56.73X to 153.22X.
   
• Retail portion got 29.31 times subscribed at the end of the first day of the IPO. However, on the third and final day of the IPO, the subscription moved from 68.35X to 119.58X.
   
• The overall IPO got 11.23 times subscribed at the end of the first day of the IPO. However, on third and final day of the IPO, overall subscription moved from 30.70X to 129.54X.

Rapid update on the overall IPO response

The IPO saw fairly steady response on the Day-1 and Day-2, with most of the action visible only on Day-3 of the IPO, as is normally the case. However, the IPO did close with relatively healthy subscription numbers at the close of Day-3. In fact, the IPO of Exicom Tele-Systems Ltd got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, Exicom Tele-Systems IPO was subscribed 129.54X overall, with best demand coming from the HNI / NII segment, followed by the QIB segment and the Retail segment in that order.

In fact, the institutional QIB segment and the HNI / NII segments saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion was relatively less aggressive, although it was fully subscribed on Day-1 of the IPO itself, but subsequent traction was also a lot more aggressive than usual. Firstly, let us look at the details of overall allocation of shares to various categories of investors. It may be noted that in the final allocation of shares, minor variations are normal as part of intra-segment adjustments. These, however, do not impact the total number of shares materially.

Data Source: BSE

Having understood the allocation of shares across various categories, Let us look at how the subscription data played out for the IPO at an overall level and at a more granular level.

As of close of 29th February 2024, out of the 182.24 lakh shares on offer in the IPO, Exicom Tele-Systems Ltd saw bids for 23,607.53 lakh shares. This implies an overall subscription of 129.54X at a macro level. The granular break-up of subscriptions was in favour of the HNI / NII investors followed by the QIB investors and the Retail 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 in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Data Source: BSE

Subscription status of QIB Portion

On 26th February 2024, Exicom Tele-Systems Ltd completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated through the process of book building. A total of 1,25,38,800 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹142 per share (including premium of ₹132 per share) which resulted in an overall allocation of ₹178.05 crore. The anchors absorbed 40.76% of the total issue size of ₹436.83 crore. The final IPO figure has been marginally revised from the original IPO size due to tweaking of the category wise allocations. It may be noted that half the anchor portion is locked for 1 month from the date of allotment i.e. up to March 31st, 2024. The other 50% is locked for 3 months from the date of allotment i.e., up to May 30th 2024.

The QIB portion (net of anchor allocation as explained above) had a quota of 103.71 lakh shares of which it has got bids for 12,631.50 lakh shares at the close of Day-3, implying a subscription ratio of 121.80X 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 Exicom Tele-Systems Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 153.22X (getting applications for 7,219.60 lakh shares against the quota of 47.12 lakh shares). That is a relatively strong 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 added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 157.69X while the below ₹10 lakh bid category (S-HNIs) got subscribed 144.29X. This is just in the form of additional information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed just 119.59X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is 10% in this IPO. For retail investors; out of the 31.41 lakh shares on offer, valid bids were received for 3,756.46 lakh shares, which included bids for 3,334.73 lakh shares at the cut-off price. The IPO is priced in the band of (₹135 to ₹142 per share) and has closed for subscription as of the close of Wednesday, 29th February 2024.

Next steps in the Exicom Tele-Systems Ltd IPO

The issue opened for subscription on 27th February 2024 and closed for subscription on 29th February 2024 (both days inclusive). The basis of allotment will be finalized on 01st March 2024 and the refunds will be initiated on 04th March 2024. In addition, the demat credits are expected to also happen on 04th March 2024 and the stock will list on 05th March 2024 on the NSE and the BSE. Exicom Tele-Systems Ltd will test the appetite for such technology driven stocks in India. The credits to the demat account to the extent of shares allotted will happen by the close of 04th March 2024 under ISIN (INE777F01014).