Ideaforge Technology IPO subscribed 3.69 times at close of Day-1

Ideaforge Technology IPO worth ₹567 crore, consists of an offer for sale and a fresh issue. Interestingly, the issue got subscribed 3.69 times at the close of Day-1 of the IPO itself. There are still two more trading days to go for the subscriptions to build up. The IPO saw good response from the HNI, the retail investors and the employee quota. All these quotas became substantially oversubscribed. However, the QIB portion did not see much of a response. That is nothing surprising since the response to the QIB portion typically comes in only on the last day of the IPO and that is when the book typically tends to get filled up. The table below captures the break-up of the shares available for subscription to each of the categories in the IPO.

In the above allocation, it must be noted that QIBs had a 75% quota under the IPO. However, since 45% was already placed through anchors, the balance 30% only is available to the QIB investors as part of the IPO. The share of retail and NII/HNI remains at 10% and 15% respectively.

How was the overall subscription after Day-1

As of close of 26th June 2023, out of the 46.49 lakh shares on offer in the IPO, Ideaforge Technology IPO saw bids for 171.52 lakh shares. This implies an overall subscription of 3.69X. The granular break-up of subscriptions was in favour of the retail and the HNI investors followed with the QIBs yet to see response. But that typically comes in only on the last day of the IPO. QIB bids and NII bids typically gather most of the momentum on the last day, and this time around we have seen good traction in HNI / NII bids on Day-1 itself.

Ideaforge Technology Ltd IPO Subscription Day-1

QIB Portion

Let us first talk about the pre-IPO anchor placement. The anchor issue of Ideaforge Technology Ltd saw a robust response on 23rd June 2023 with 45% of the IPO size getting absorbed by the anchors. Out of the 84,37,500 shares on offer, the anchors picked up 37,92,894 shares accounting for 45% of the total IPO size. Here are some of the major anchor investors in the IPO.

The QIB portion (net of anchor allocation as explained above) has a quota of 25.29 lakh shares of which it has got bids for 0.35 lakh shares at the close of Day-1, implying a subscription ratio of 0.01X for QIBs at the close of Day-1. 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 Ideaforge Technology Ltd IPO subscription overall, the actual demand for the IPO is likely to be strong on the last day from the QIBs.

HNI / NII Portion

The HNI portion got subscribed 5.13X (getting applications for 64.85 lakh shares against the quota of 12.64 lakh shares). That is a rather steady response at the close of Day-1 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 is likely to build heft in the next few days of the IPO. We have to wait and watch.

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 4.18X while the below ₹10 lakh bid category (S-HNIs) got subscribed 7.04X. 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 subscribed just 12.48X at the close of Day-1, showing strong retail appetite. It must be noted that retail allocation is only 10% in this IPO. For retail investors; out of the 8.43 lakh shares on offer, valid bids were received for 105.21 lakh shares, which included bids for 92.50 lakh shares at the cut-off price. The IPO is priced in the band of (₹638-₹672) and today is just the first day of the IPO. The IPO closes for subscription only on 29th June 2023.