Hi-Green Carbon IPO Final Subscription Status

Hi-Green Carbon IPO closed on Monday, 25th September 2023. The IPO had opened for subscription on 21st September 2023. Let us look at the final subscription status of Hi-Green Carbon Ltd at the close of subscription on 25th September 2023. It is a book built issue with the price band in the range of ₹71 to ₹75 per share and the stock has a face value of ₹10 per share.

About the Hi-Green Carbon IPO

Hi-Green Carbon IPO has a fresh issue component and also has an offer for sale (OFS) component. As part of the fresh portion of the IPO, Hi-Green Carbon Ltd will issue a total of 59,90,000 shares (59.90 lakh shares), which at the upper end of the price band of ₹75 per share aggregates to a total fresh fund raising of ₹44.92 crore. As part of the offer for sale (OFS) portion of the IPO, it will entail the sale of 10,50,000 shares (10.50 lakh shares), which at the upper end of the price band of ₹75 per share aggregates to an OFS size of ₹7.88 crore. The entire offer for sale is being made by the promoter M/S RNG Finlease Private Ltd. As a result, the total IPO of Hi-Green Carbon Ltd will entail the issue cum sale of a total of 70,40,000 shares (70.40 lakh shares), which at the upper end of the band price of ₹75 per share aggregates to a total IPO size of ₹52.80 crore.

The minimum lot size for the IPO investment was 1,600 shares. Thus, retail investors can invest a minimum of ₹1,20,000 (1,600 x ₹75 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 3,200 shares and having a minimum lot value of ₹2,40,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

There is no upper limit for the HNI / NII category and the QIB category who can put in bids of any amount.

Final subscription status of Hi-Green Carbon IPO

Here is the subscription status of the Hi-Green Carbon IPO as at close on 25th September 2023.

The issue was open for QIB investors, retail investors and for the HNI / NII categories, with each of the above categories getting substantially oversubscribed by the close of the IPO. A total of 4,20,800 shares were allocated as market maker portion to Spread X Securities 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.

There was a broad quota designed for each of the segments and the table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. Here is a quick look at how the share allocation was made across categories in terms of the quotas available for subscription.

A total of 19.84 lakh shares were allocated to anchor investors a day ahead of the opening of the IPO and the entire anchor allocation was done at the upper price band of ₹75 per share. The total value of the anchor allotment was ₹14.88 crore. Here are the top 5 anchor allocations out of the 8 anchors who got allocated shares. The top 5 anchor include Resonance Opportunities Fund (21.13%), NAV Capital Emerging Star Fund (19.60%), BOFA Securities Europe (13.71%), Morgan Stanley Asia Singapore (13.47%), and Moneywise Financial Services Private Ltd (11.77%).

How subscription built up for the Hi-Green Carbon IPO

The oversubscription of the IPO was dominated by the HNI / NII investors followed by the retail investors and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Hi-Green Carbon Ltd IPO.

It is clear from the above table that the retail portion, HNI / NII portion and also the QIB portion got fully subscribed on the first day of the IPO itself. As a result, the overall IPO also got fully subscribed on the first day of the IPO. The QIB segment, the retail segment and the HNI / NII segment saw good traction on the last day, and at 168.92 times, the subscription is substantially above the median of SME IPOs. There is an allocation of 4,20,800 shares to Spread X Securities Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

Here are the key dates relevant for the Hi-Green Carbon IPO

The IPO of Hi-Green Carbon Ltd will get listed in the NSE SME segment, which is the segment on which the NSE incubates the listed start-ups.

A quick word on Hi-Green Carbon Ltd and the SME IPO

Hi-Green Carbon Ltd was incorporated in the year 2011 and the company is engaged in the business of waste tyres recycling. It has a manufacturing plant located in the state of Rajasthan, which operates on a continuous pyrolysis process. This process entails an uninterrupted working process with continuous feeding and discharging system controlled by the program logic controller (PLC). The entire process is automated end-to-end with virtually no human intervention, making it economical and also largely error free. The plant in Rajasthan has the capacity to recycle 100 MT of waste tyres per day. Hi-Green Carbon Ltd is also planning to put up another manufacturing plant with similar capacity in the Dhule district of Maharashtra.

The company recycles the waste tyres and manufactures a number of products out of it. Some of its key products include Recovered Carbon Black (RCB) and Steel Wires under Raw Material Category and Fuel Oil and Synthesis Gas under Energy components category. The Synthesis Gas is further used for the manufacture of sodium silicate better known in common parlance as raw glass. The company is fully compliant with good manufacturing practice (GMP) and all its products are also compliant in terms of the applicable sustainability standards.

The company has been promoted by M/S RNG Finlease Private Ltd, Amitkumar Bhalodi, Shaileshkumar Makadia, Krupa Detharia, Radhika Bhalodi, Shriyakumari Makadia and Koosh Detharia. The promoter holding in the company currently stands at 100.00%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will reduce to 71.83%. The fresh issue funds will be used by the company for setting up a new manufacturing unit in Maharashtra, meeting of working capital funding gaps and also for general corporate purposes. While Beeline Capital Advisors Private Ltd will be the lead manager to the issue, Link Intime India Private Ltd will be the registrar to the issue. The market maker for the issue is Spread X Securities Ltd.