Micropro Software IPO: Subscribed 36.88 Times

About the Micropro Software Solutions IPO

The IPO of Micropro Software Solutions Ltd  opened for subscription on 03rd November 2023 and closed for subscription on 07th November 2023. The stock of Micropro Software Solutions Ltd had a face value of ₹10 per share and it is a fixed price issue with the IPO price already set at ₹81 per share. The IPO of Micropro Software Solutions Ltd has only a fresh issue component with no book built portion. As part of the fresh portion of the IPO, Micropro Software Solutions Ltd will issue a total of 37,90,400 shares (37.90 lakh shares approximately), which at the fixed IPO price of ₹81 per share aggregates to a total fund raising of ₹30.70 crore. Since there is no offer for sale portion, the total size of the issue will also be the total size of the IPO. Hence the total IPO size will also comprise of 37,90,400 shares, which at the fixed IPO price of ₹81 per share aggregates to an overall issue size of ₹30.70 crore.

The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹129,600 (1,600 x ₹81 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 ₹259,200. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. Like every SME IPO, this issue also has a market making portion with inventory allocation of 1,90,400 shares. The market maker for the issue is Nikunj Stock Brokers Ltd; with a mandate to provide two-way quotes to ensure liquidity on the counter and low basis costs, post listing. Post the IPO, the promoter stake will get diluted from 63.40% to 45.17%. The fresh issue funds will be used to fund some of its capex plans and for working capital gaps. Swaraj Shares & Securities Private Ltd will be the lead manager to the issue, and Purva Share Registry India Private Ltd will be the registrar to the issue.

Final subscription status of Micropro Software Solutions IPO

Here is the subscription status of the Micropro Software Solutions IPO as at close on 07th November 2023.

As can be seen from the above table, the overall IPO of Micropro Software Solutions Ltd got subscribed an impressive 36.88 times. The retail portion led the stakes with 49.08 times subscription, followed by the HNI / NII portion at 22.60 times subscription. There was no QIB allocation in the IPO. Overall, that is a moderately smart response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past. The subscription has shown strong traction for the IPO across the retail and the HNI / NII categories of investors.

Allocation quota for various categories

The issue was open for retail investors, and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, and the HNI / NII segments. A total of 1,90,400 shares were allocated as market maker portion to Nikunj Stock Brokers Ltd, which will act as market maker inventory 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.

The anchor allotment is normally done a day ahead of the IPO opening. In the case of Micropro Software Solutions Ltd, there is no QIB quota and hence there is no question of the anchor allocation as the anchor allocation is normally carved out of the QIB quota. The market making portion of 5.02% is independent of the anchor allocation. The anchor portion is carved out of the QIB portion and so the QIB quota available to the public will be reduced by the anchor size. In this case, in the absence of any QIB quota allocation and no anchor allocation, the entire equity issue (net of the market making allocation), is equally divided between the retail investors and the HNI / NII investors.

How subscription built up for the IPO of Micropro Software IPO?

The oversubscription of the IPO was dominated by the HNI / NII followed by the Retail category and the QIB category in that order. The table below captures the day-wise progression of the subscription status of Micropro Software Solutions Ltd. The IPO was kept open for 3 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Micropro Software Solutions Ltd.

• The Retail portion got the best subscription in the Micropro Software Solutions Ltd IPO at 49.08 times and it got 3.73 times subscribed on the first day of the IPO itself.
   
• The HNI / NII portion got the next best subscription in the Micropro Software Solutions Ltd IPO at 22.60 times and it got 0.35 times subscribed on the first day of the IPO itself.
   
• The overall IPO was also fully subscribed on the first day itself. The IPO of Micropro Software Solutions Ltd got overall subscribed 36.88 times and it got 2.04 times subscribed on the first day of the IPO itself.
   
• Both the retail and the HNI / NIII category saw the best traction on the last day of the IOP. For instance, the retail portion saw subscription ratio moving from 18.15X to 49.08X on the last day of the IPO. Even the HNI / NII portion saw the subscription ratio move from 2.19X to 22.60X on the last day of the IPO.
   
• Similarly, even the overall IPO saw smart traction on the last day with the subscription ratio for the overall IPO moving from 10.18X to 36.88X on the last day. The overall IPO got fully subscribed on Day-1, but saw the best traction on the last day.

With the IPO closed for subscription at the end of November 07th, 2023, the next piece of action shifts to the finalization of the basis of allotment and later to the listing of the IPO. The basis of allotment will be finalized on 10th November 2023 while the refunds would be initiated on 13th November 2023. The shares of Micropro Software Solutions Ltd (ISIN - INE0PZK01014) would be credited to the demat accounts of eligible shareholders by the close of 15th November 2023 while the stock of Micropro Software Solutions Ltd is expected to be listed on 16th November 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.