JNK India IPO Subscribed 28.07 times

About the JNK India IPO

JNK India IPO has a face value of ₹2 per share and the price band for the book building IPO has been set in the range of ₹395 to ₹415 per share. JNK India IPO is a combination of fresh issue and an offer for sale. The fresh issue brings in fresh funds into the company, but is also EPS and equity dilutive. On the other hand, OFS is just a transfer of ownership, and hence the OFS is neither equity dilutive nor is it EPS dilutive. The fresh issue portion of the JNK India IPO comprises the issue of 73,57,215 shares (73.57 lakh shares approximately), which at the upper price band of ₹415 per share will translate into a fresh issue size of ₹305.33 crore.

The offer for sale (OFS) will comprise the sale of 84,21,052 shares (84.21 lakhs shares approximately), which at the upper price band of ₹415 aggregates to OFS size of ₹349.47 crore. The entire OFS of 84.21 lakhs shares is being made by the 3 promoter shareholders and 1 investor shareholder. The 3 promoter shareholders will offer Goutam Rampelli (11.23 lakh shares), JNK Global Company (24.33 lakh shares), and Mascot Capital (43.98 lakh shares. One investor shareholder, Milind Joshi, will offer 4.68 lakh shares in the OFS.

As a result, the overall size of the IPO of JNK India Ltd will comprise of a fresh issue and OFS of 1,57,78,267 shares (157.78 lakh shares approximately), which at the upper end of the price band of ₹415 per share aggregates to total issue size of ₹654.80 crore. The IPO of JNK India Ltd will be listed on the NSE and the BSE on the IPO mainboard. The fresh funds will be used to fund the working capital needs of the company and also for general corporate purposes. Promoters currently hold 94.56% in the company, which will get diluted post the IPO to 67.53%. The IPO will be lead managed by IIFL Securities Ltd and ICICI Securities, while Link Intime India Private Ltd will be the registrar to the IPO.

Read more about JNK India IPO

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. In fact, the QIB portion got fully subscribed only on the last day of the IPO while the retail portion and the HNI portion got fully subscribed on the second day of the IPO. The overall IPO also saw the subscription book filling up on the second day of the IPO, although most of the traction of institutions and HNIs was only visible on the third and final day of the IPO on 25th April 2024. 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 slowed in the subsequent days, which is the general norm for retail. In terms of subscription ratio, the retail portion subscription trailed behind the QIB and the HNI / NII portion respectively. Here is the day-wise progress in IPO subscription of the total available quota. The available over subscription in the table below represents the oversubscription; net of the anchor allocation of shares, done one working day prior to the opening of the IPO.

Data Source: BSE

As can be seen from the above table, the overall IPO got 28.07 times subscribed at the close of the third and final day of the IPO on 25th March 2024. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got 0.66 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 0.67X to 75.72X.
   
• The HNI / NII portion got 0.26 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 1.28X to 23.19X.
   
• Retail portion got 0.52 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 1.17X to 4.01X.
   
• The overall IPO got 0.50 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 1.05X to 28.07X.

Rapid update on the overall IPO response

The IPO saw fairly tepid 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 JNK India Ltd got fully subscribed only on the second day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, JNK India Ltd IPO was subscribed 28.07X overall, with best demand coming from the QIB Segment, followed by the HNI / NII 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 on the last day, although it was fully subscribed on Day-2 of the IPO, but subsequent traction was a tad lower in comparison. 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 25th March 2024, out of the 110.83 lakh shares on offer in the IPO, JNK India Ltd saw bids for 3,110.55 lakh shares. This implies an overall subscription of 28.07X at a macro level. The granular break-up of subscriptions was in favour of the QIB segment followed by the HNI / NII 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. The overall subscription is exclusive of the anchor portion.

Data Source: BSE

Subscription status of QIB Portion

On 22nd April 2024, JNK India 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 46,94,989 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹415 per share (including premium of ₹413 per share) which resulted in an overall allocation of ₹194.84 crore. The anchors absorbed 29.75% of the total issue size of ₹654.80 crore.  It may be noted that half the anchor portion is locked for 1 month from the date of allotment i.e. up to May 26th, 2024. The other 50% is locked for 3 months from the date of allotment i.e., up to July 25th 2024.

The QIB portion (net of anchor allocation as explained above) had a quota of 30.75 lakh shares of which it has got bids for 2,328.54 lakh shares at the close of Day-3, implying a subscription ratio of 75.72X 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 JNK India 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 23.19X (getting applications for 557.14 lakh shares against the quota of 24.02 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 27.10X while the below ₹10 lakh bid category (S-HNIs) got subscribed 15.37X. 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 a modest 4.01X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 56.06 lakh shares on offer, valid bids were received for 224.88 lakh shares, which included bids for 197.56 lakh shares at the cut-off price. The IPO is priced in the band of (₹395 to ₹415 per share) and has closed for subscription as of the close of Thursday, 25th April 2024. The final pricing decision in the ban is awaited, though upper end looks likely.

Next Steps in the JNK India IPO

The issue opens for subscription on 23rd April 2024 and closes for subscription on 25th April 2024 (both days inclusive). The basis of allotment will be finalized on 26th April 2024 and the refunds will be initiated on 29th April 2024. In addition, the demat credits are expected to also happen on 29th April 2024 and the stock will list on 30th April 2024 on the NSE and the BSE. JNK India Ltd will test the appetite for such support stocks in India. The credits to the demat account to the extent of shares allotted will happen by the close of 29th April 2024 under ISIN (INE0OAF01028).