Holmarc Opto-Mechatronics IPO Final Subscription Details

The IPO of Holmarc Opto-Mechatronics Ltd closed on Wednesday, 20th September 2023. The IPO had opened for subscription on 15th September 2023. Let us look at the final subscription status of Holmarc Opto-Mechatronics Ltd at the close of subscription on 20th September 2023. It was a fixed price issue with the IPO price fixed at ₹40 per share and the stock has a face value of ₹10 per share.

About the Holmarc Opto-Mechatronics Ltd IPO

The ₹11.40 crore of Holmarc Opto-Mechatronics IPO comprises entirely of a fresh issue with no offer for sale (OFS) component. The Fresh Issue portion of Holmarc Opto-Mechatronics Ltd entails the issue of 28.50 lakh shares at which at the fixed IPO price of  ₹40 per share aggregates to ₹11.40 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 3,000 share each. Thus, the minimum investment of ₹120,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs / NIIs can invest in a minimum of 2 lots of 6,000 shares worth ₹240,000 as the bare minimum investment. There is no upper limit for the HNI / NII category or even for the QIB category. Holmarc Opto-Mechatronics Ltd will deploy the funds for capex for buying additional plant and machinery as well as for working capital needs. Part of the IPO flows will also be used for general corporate expenses. Post the IPO, the promoter equity in the company will get diluted from 87.30% to 62.54%. The issue is lead managed by Finshore Management Services Ltd, while Cameo Corporate Services Ltd will be the registrars to the issue. Let us now turn to the final subscription details of the IPO as of the close of subscription on 20th September 2023.

Final subscription status of Holmarc Opto-Mechatronics IPO

Here is the subscription status of the Holmarc Opto-Mechatronics IPO as at close on 20th September 2023.

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 retail and the non-retail segments, with the latter predominantly comprising of HNIs / NIIs and to a lesser extent the corporates and QIBs too. A total of 1,44,000 shares were allocated as market maker portion to Nikunj Stock Brokers 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. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

As can be seen, from the above table, the company has not made any allocation for anchor investors. Hence there was no anchor allocation ahead of the IPO opening date. Out of the total issue available, 5.05% of the shares were set aside for the market maker inventory to provide liquidity and two-way quotes post listing. The balance number of shares (called the net offer to public) was equally distributed between the retail investors and the non-retail investors. The non-retail predominantly includes the HNI / NII investors and to a lesser extent the corporates and QIBs too. The anchor portion is normally adjusted to the overall QIB quota, in the event of anchor allocation.

How subscription built up for the IPO of Holmarc Opto-Mechatronics Ltd

The oversubscription of the IPO was dominated by the HNI / NIIs followed by the retail investors in that order, although both categories saw substantial response to the IPO. The table below captures the day-wise progression of the subscription status of Holmarc Opto-Mechatronics Ltd IPO, leading up to the close of the IPO.

It is clear from the above table that while the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion got fully subscribed only on the second day. However, the overall IPO was fully subscribed on the first day itself although most of the traction was seen on the last day. Both the categories of investors viz., HNIs / NIIs and retail categories saw good traction and build up of interest on the last day of the IPO. There is an allocation of 1,44,000 shares to Nikunj Stock Brokers 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.

The IPO of Holmarc Opto-Mechatronics Ltd opened for subscription on 15th September 2023 and closed for subscription on 20th September 2023 (both days inclusive). The basis of allotment will be finalized on 25th September 2023 and the refunds will be initiated on 26th September 2023. In addition, the demat credits are expected to happen on 27th September 2023 and the stock is scheduled to list on 28th September 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.

A quick word on Holmarc Opto-Mechatronics Ltd and the SME IPO

Holmarc Opto-Mechatronics Ltd was incorporated in the year 1993 and is engaged in the business of manufacture of scientific and engineering instruments. Its main target customers are research, industry, and education. These instruments are designed and developed by Holmarc Opto-Mechatronics Ltd. Their product portfolio comprises of imaging instruments, measuring instruments, analytical instruments, laboratory instruments, opto-mechanical instruments, spectroscopy and is also into industrial automation. It is also into the manufacture of products like quantum efficiency measurement instruments for solar cells and UV laser marking stations, which are some of the products that are part of the import substitution program of the government of India.

Some of the specialized products manufactured by Holmarc Opto-Mechatronics Ltd include automated rotary antennae positioners, spectroscopic ellipsometer, UV ozone cleaners, spectroscopic reflectometers, and Raman spectrometer. It has over 800 standards products in its portfolio and I addition, it also customizes products to unique needs of its customers. Holmarc Opto-Mechatronics Ltd has a manufacturing unit located at Ernakulam in Kerala and the company has been reporting consistent growth in sales over the last 3 years.

The company has been promoted by Jolly Cyriac and Ishach Sainuddin. The promoter holding in the company currently stands at 87.30%. However, post the fresh issue of shares as part of the IPO, the promoter equity holding share will reduce to 62.54%. The fresh issue funds will be used by the company for funding capex and purchase of additional machinery. Part of the funds will also go towards working capital needs of the company and also towards general corporate purposes. While Finshore Management Services Ltd will be the lead manager to the issue, Cameo Corporate Services Ltd will be the registrar to the issue. The market maker for the issue is Nikunj Stock Brokers Ltd.