Fusion Micro Finance Ltd IPO subscribed 2.95 times at close

The Rs.1,103.99 crore IPO of Fusion Micro Finance Ltd, consisted of a fresh issue component of Rs600 crore and an offer for sale of Rs503.99 crore. The IPO saw fairly tepid response on Day-1 and Day-2 of the IPO and closed with tepid numbers at the close of Day-3. In fact, the company got its 1 time subscription only around mid-day on the last day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Fusion Micro Finance Ltd IPO was subscribed at 2.95X overall, with best demand coming from the QIB segment. In fact, only the institutional segment saw some good traction on the last day. The HNI portion got just about subscribed while the retail portion was undersubscribed at the close.

Read More: Fusion Micro Finance Ltd IPO gets 30% anchor allocated

As of close of 04th November 2022, out of the 213.76 lakh shares on offer in the IPO, Fusion Micro Finance Ltd saw bids for 630.36 lakh shares. This implies an overall subscription of 2.95X. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion was not even fully subscribed. 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. However, the NII bids hardly picked momentum even on the last day and just about got subscribed.

Fusion Micro Finance Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 01st November 2022, Fusion Micro Finance Ltd did an anchor placement of 89,99,943 shares at the upper end of the price band of Rs.368 to 17 anchor investors raising Rs.331.20 crore. The list of QIB investors included a number of marquee global names like Nomura, Massachusetts Institute of Technology, BNP Paribas Arbitrage ODI, ICICI Prudential Mutual Fund, Kotak Mutual Fund, Bajaj Allianz Life Insurance, Aditya Birla Sun Life Mutual Fund etc.

The QIB portion (net of anchor allocation as explained above) has a quota of 59.56 lakh shares of which it has got bids for 511.53 lakh shares at the close of Day-3, implying a subscription ratio of 8.59X 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 Fusion Micro Finance Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 1.38X (getting applications for 63.63 lakh shares against the quota of 46.26 lakh shares). That is a rather tepid 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 not exactly visible as the overall HNI / NII portion itself got just about subscribed. However, the HNI portion did eventually manage to sail through.

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 1.52X while the below Rs10 lakh bid category (S-HNIs) got subscribed 1.09X. 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 undersubscribed getting just 0.51X at the close of Day-3, showing very low retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 107.93 lakh shares on offer, valid bids were received for only 55.21 lakh shares, which included bids for 45.02 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.350-Rs.368) and has closed for subscription as of the close of Friday, 04th November 2022.