Proventus Agrocom IPO: Final subscription status

The IPO of Proventus Agrocom Ltd closed on Friday, 26th May 2023. The IPO had opened for subscription on 24th May 2023. Let us look at the final subscription status of Proventus Agrocom Ltd at the close of subscription on 26th May 2023.

A quick word on Proventus Agrocom Ltd and the SME IPO

Let us begin with a quick background of Proventus Agrocom Ltd on the NSE SME IPO segment. The company was established in the year 2015 as an innovative health food brand to cater to the growing demand for healthy eating. The product portfolio of Proventus comprises of the full range of dry fruits, nuts, seeds, and berries and is part of the healthy snack value chain via a farm to fork model. This concept of healthy snack with strong dry fruit presence is missing in India and the core purpose of this company is also to cater to the growing demand for food products from the organized segment. Post pandemic, there has bene a preference for more hygienically prepared and packaged food products.

Proventus Agrocom is positioned as a one-stop shop for healthy snacking solutions, which are quick and nutritious. In recent years, there has been a shift in consumer preferences from unbranded products to branded products; even in tier-2 cities and towns. Proventus sells under the brand name of PROV. Once the IPO funds are raised, the company plans to use the fresh funds for working capital of the parent and its subsidiary. The issue will be lead managed by Sundae Capital Advisors Limited while Bigshare Services Private Ltd will be the registrars to the SME IPO of Proventus Agrocom Ltd. Ajcon Global Services is the market maker to this IPO.

The ₹69.54 crore IPO of Proventus Agrocom Ltd comprises of a fresh issue of shares to the public and an offer for sale. The total SME IPO of Proventus Agrocom Ltd entails the issue of 901,920 shares which at the fixed price for the IPO at ₹771 per share aggregates to ₹69.54 crore. The IPO is a combination of fresh issue of shares and an offer for sale. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 160 share each. Thus, the minimum investment of ₹123,360 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs can invest in 2 lots of 320 shares worth ₹246,720 as the bare minimum investment. There is no upper limit for the HNI / NII category. Proventus Agrocom Ltd will deploy the funds for working capital needs of the company and also of its subsidiary company. Post the IPO, the promoter equity in the company will get diluted from 92.29% to 70.84%. The issue is lead managed by Sundae Capital Advisors 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 26th May 2023.

Final subscription status of Proventus Agrocom Ltd

Here is the subscription status of the Proventus Agrocom Ltd IPO as at close on 26th May 2023.

The issue was only open for retail investors, and for the HNI / NIIs. There was no specific quota designated for the QIBs. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

There was no anchor allotment made due to the absence of any QIB portion in the IPO. The entire shares were allotted to the retail and the non-institutional HNI / NII categories only as stated in the table above. Let us now turn to how the growth of the subscription panned out over the 3 days of subscription.

The oversubscription of the IPO was dominated by the HNI / NIIs with the retail investors portion actually getting undersubscribed. The table below captures the day-wise progression of the subscription status of Proventus Agrocom Ltd IPO.

It is clear from the above table that the NII / HNI portion got fully subscribed only on the last day of the IPO with the total subscription standing at just 0.26 times even at the close of the second day. The retail portion remained undersubscribed till close mopping up just 70% of its quota. However, the IPO of Proventus Agrocom showed some traction in HNI / NII demand on the last day. There is an allocation of 45,120 shares to Ajcon Global Services Ltd for market making, which has been included in the HNI / NII quota.

The IPO of Proventus Agrocom Ltd opened for subscription on 24th May 2023 and closed for subscription on 26th May 2023 (both days inclusive). The basis of allotment will be finalized on 31st May 2023 and the refunds will be initiated on 01st June 2023. In addition, the demat credits are expected to happen on 02nd June 2023 and the stock is scheduled to list on 05th 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.