Kore Digital IPO Closing Subscription Updates

Kore Digital IPO closed on Wednesday, 07th June 2023. The IPO had opened for subscription on 02nd June 2023. Let us look at the final subscription status of Kore Digital IPO at the close of subscription on 07th June 2023.

A quick word on Kore Digital Ltd and the SME IPO

Here is what the business model of Kore Digital Ltd is all about. It is one of the key mid-sized telecom infrastructure providers in India, offering high-end communication solutions to corporate and Telecom Network Operators. It area of operations is predominantly in the state of Maharashtra, where it undertakes telecom infrastructure related services like installing and commissioning poles, towers, and optical fibre cable (OFC) Systems. The company has a full-fledged Infrastructure Provider (IP-1) license issued by DOT, and this license is the key to the operations of the company in this particular vertical.

Let us understand why this DOT licence is so critical. The license is the key to establish and maintain assets; Dark Fibres, right of way, duct space, and towers to grant on lease or rent or sale basis to the licensees of Telecom Network Operators, Broad Band Service Operators, and ISPs. In the past, Kore Digital has laid cables for marquee industry names like Vodafone Idea, Bharti Airtel, Reliance Jio, and Tata Teleservices Maharashtra Ltd. The company will use the fresh funds raised via IPO for working capital needs and to make inorganic acquisitions to deepen its presence in its core business verticals.

Kore Digital IPO, worth ₹18.00 crore, comprised entirely of a fresh issue and there was no offer for sale component in the IPO. The total SME IPO of Kore Digital Ltd entails the fresh issue of 10,00,000 (10 lakh) shares at the IPO fixed price of ₹180 per share aggregating to ₹18.00 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 800 shares each. Thus, the minimum investment of ₹144,000 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 2 lots of 1,600 shares worth ₹288,000 as the bare minimum investment. There is no upper limit for the HNI / NII category. Kore Digital Ltd will deploy the funds for working capital needs of the company and for making strategic acquisitions in its core verticals. Post the IPO, the promoter equity in the company will get diluted from 99.70% to 71.38%. The issue is lead managed by First Overseas Capital Ltd, while Bigshare Services Private 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 07th June 2023.

Final subscription status of Kore Digital Ltd

Here is the subscription status of the Kore Digital Ltd IPO as at close on 07th June 2023.

The issue was only open for retail investors, and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the retail and the HNI / NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

The 10 lakh shares represent the total quota available for subscription since there was no anchor allocation done in the IPO. The market making quota is carved out of the HNI / NII quota.

The oversubscription of the IPO was dominated by the HNI / NIIs 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 Kore Digital Ltd IPO.

It is clear from the above table that while the HNI / NII portion got fully subscribed on the first day of the IPO itself, the retail portion got fully subscribed only on the second day of the IPO. 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 52,000 shares to NNM Securities ltd for market making, which has been included in the HNI / NII quota.

The IPO of Kore Digital Ltd opened for subscription on 02nd June 2023 and closed for subscription on 07th June 2023 (both days inclusive). The basis of allotment will be finalized on 12th June 2023 and the refunds will be initiated on 13th June 2023. In addition, the demat credits are expected to happen on 14th June 2023 and the stock is scheduled to list on 15th June 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.