Radiant Cash Management IPO: Closing subscription numbers

Radiant Cash Management IPO Rs. 387.94 crore, consisted of a fresh issue of shares of Rs. 60 crore and an offer for sale (OFS) for Rs. 327.94 crore. While the fresh issue gets in fresh funds infused, it is also equity dilutive. The OFS is just a transfer of ownership but it is not equity dilutive. The IPO saw very tepid response on all the days and did not even manage to get half its total issue subscribed with the IPO closed on the third and final day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Radiant Cash Management Systems Ltd IPO was subscribed just 0.53 times or 53% overall, with the QIBs segment just about getting subscribed but the HNI / NII segment and retail segment falling well short of their allocated quotas and getting undersubscribed.

As of close of 27th December 2022, out of the 274.30 lakh shares on offer in the IPO, Radiant Cash Management Systems Ltd saw bids for just 145.74 lakh shares. This implies an overall subscription of just 0.53 times or 53%. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion got the lowest subscription among the various categories. However, all categories got undersubscribed. QIB bids and NII bids typically gather most of the momentum on the last day, and that was just not visible in the case of Radiant Cash Management Systems Ltd.

Radiant Cash Management Systems Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 22nd December 2022, Radiant Cash Management Systems Ltd did an anchor placement of 1,17,55,681 shares at the upper end of the price band of Rs. 99 to 16 anchor investors raising Rs. 116.38 crore. The list of QIB investors included a number of marquee global names like Emerging Business Fund, Societe Generale, BNP Paribas, Saint Capital etc; apart from a host of Indian mutual fund and alternate investment companies.

The QIB portion (net of anchor allocation as explained above) has a quota of 78.37 lakh shares of which it has got bids for 79.35 lakh shares at the close of Day-3, implying a subscription ratio of 1.01X 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 Radiant Cash Management Systems Ltd IPO subscription overall, the actual demand did not live up to that promise.

HNI / NII Portion

The HNI portion got subscribed 0.66 times or 66% (getting applications for 38.77 lakh shares against the quota of 58.78 lakh shares). That is an extremely tepid 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 not exactly visible as the overall HNI / NII portion fell deeply short of the targeted fund raising plan.

Now the NII/HNI portion is reported in two parts viz. bids below Rs. 10 lakhs (S-HNI) and bids above Rs. 10 lakhs (B-HNI). The bids above the Rs. 10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs. 10 lakh bid category got subscribed 0.94 times or 94% while the below Rs. 10 lakh bid category (S-HNIs) got subscribed just 0.09 times or 9%. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was subscribed 0.20 times at the close of Day-3, showing very tepid retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 137.15 lakh shares on offer, valid bids were received for only 27.62 lakh shares, which included bids for 23.51 lakh shares at the cut-off price. The IPO is priced in the band of (Rs. 94-Rs. 99) and has closed for subscription as of the close of Tuesday, 27th December 2022.