Nephro Care India IPO Subscription Status

Nephro Care India IPO - Day-1 Subscription at 16.45 times

As of 5.12 pm on 28th June 2024, out of the 31.152 lakh shares on offer in the IPO (excluding the market maker portion and the anchor allocation done), Nephro Care India saw bids for 512.496 lakh shares. This implies an overall subscription of 16.45X at a macro level at the close of Day-1 of the IPO. The granular break-up of subscriptions as of the close of Day-1 of the Nephro Care India IPO was as follows:

The subscriptions were led by the Retail investors followed by the HNI / NII investors and then by the QIB investors in that order. The QIB quota and the NII / HNI will typically gather most of the momentum on the last day, and that would be the case in this issue also in the case of the HNI / NII bids and the QIB bids. The NII bids pick up momentum on the last day since that is when the bulk HNI funding bids, corporate bids and the large HNI bids come in. Even the institutional bids come in on the last day in the first half. Here are the details of the category-wise subscription. The overall subscription ratio calculation excludes anchor portion and also the market making portion in the IPO.

Data Source: NSE

The IPO is open up to July 02nd, 2024, at which point we will know the final subscription status of the IPO. As of today, the status is only updated as of the end of Day-1 of the IPO. The QIB and the HNI / NII categories see the best momentum coming only on the last and final day of the IPO, while the retail investors predominate on the first two days of the IPO. The market maker portion and anchor quota are excluded for the purpose of calculating the number of times subscription to get a realistic picture of the IPO subscription story.

Nephro Care India – Share Allocation Across Categories

The table below captures the break-up of the overall share allocation to QIBs, retail investors and to the HNI / NII investors. The anchor allotment is carved out of the QIB quota and the QIB quota is reduced accordingly. The market maker allocation is the inventory that will be used by the market maker to provide liquidity in the counter post listing, to keep the bid-ask spreads low and reduce the risks of trading in the stock. The company has appointed SS Corporate Securities Ltd as the market maker and assigned a market making inventory of 2,30,400 shares to them. The market maker will use this inventory to offer buy and sell quotes to keep the counter liquid and reduce the basis risk on the stock post listing.

Data Source: Company RHP

The issue size, net of the market maker quota, has been divided between the QIB investors, retail investors and the HNI / NII investors. On June 27, 2024, the company made an anchor allocation of 12,38,400 shares to anchor investors at a price of ₹90 per share. This included the par value of ₹10 per share and premium of ₹80 per share. The total size of the anchor allocation was ₹11.15 crore.

The anchor allocation was done across 3 anchor investors at the upper end of the price band at ₹90 per share. These 3 major anchor investors included CCV Emerging Opportunities Fund - I (62.92%), Persistent Growth Fund – Varsu India (28.04%), and Vikasa India EIF-I Fund – Incube Global Opportunities (9.04%). There were no other anchor investors allotted shares in the pre-IPO anchor bidding on June 27, 2024.

Out of the total anchor allocation of ₹11.15 crore, a total of 50% of the allocation will have a 1-month lock in up to August 02, 2024 and the balance 50% will have a 3-month lock-in up to October 01, 2024. The anchor portion was carved out of the QIB portion, as a result of which the QIB quota available in the IPO was reduced from 45.03% to 18.01%. The stock will list on the stock exchanges on the third working day after the closure of the IPO.

About Nephro Care India IPO

The stock of Nephro Care India has a face value of ₹10 per share and it is a book built issue. The price for the book building issue is set in the price band of ₹85 to ₹90 per share. Being a book built issue, the final price will be discovered within this band. The IPO of Nephro Care India has entirely a fresh issue component and no offer for sale (OFS) portion. While the fresh issue portion is EPS dilutive and equity dilutive, the OFS is just a transfer of ownership and  hence is not EPS or equity dilutive. As part of the fresh issue portion of the IPO, Nephro Care India  will issue a total of 45,84,000 shares (45.84 lakh shares), which at the upper band IPO price of ₹90 per share aggregates to fresh fund raising of ₹41.26 crore. Since there is no offer for sale, the fresh issue will also double up as the total issue size. Hence the overall IPO size will also comprise of the fresh issue of 45,84,000 shares (45.84 lakh shares) which at the upper band IPO price of ₹90 per share will aggregate to overall IPO size of ₹41.26 crore.

Like every SME IPO, this issue also has a market making portion. The company has set aside a total of 2,30,400 shares as quota for market making inventory. SS Corporate Securities Ltd will be the market maker to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs. The company has been promoted by Dr Pratim Sengupta. The promoter holding in the company currently stands at 85.02%. However, post the fresh issue of shares, promoter equity holding share will get diluted to 61.38%. The fresh issue funds will be used by the company to set up a multi-speciality hospital under the banner of “Vivacity Multi-Specialty Hospital” which will also be focused on Nephro care. A small part of the IPO proceeds has also be set aside for general corporate purposes. Corporate Capital Ventures Private Ltd will be the lead manager to the issue, and Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is yet to be announced by the company. The IPO of Nephro Care India  will be listed on the SME IPO segment of the NSE.

Next Steps in the Nephro Care India IPO process

The issue opened for subscription on 28th June 2024 and closes for subscription on 02nd July 2024 (both days inclusive). The basis of allotment will be finalized on 03rd July 2024 and the refunds will be initiated on 04th July 2024. In addition, the demat credits are expected to also happen on 04th July 2024 and the stock will list on 05th July 2024 on the SME segment of the NSE. The credits to the demat account to the extent of shares allotted will happen by the close of 04th July 2024 under ISIN (INE0SUN01013).