Rocking Deals Circular Economy IPO subscribed 213.64 times

About the Rocking Deals Circular Economy IPO

Rocking Deals Circular Economy IPO opened for subscription on 22nd November 2023 and closed for subscription on 24th November 2023. The stock of the company had a face value of ₹10 per share and it is a book building issue, with the price band fixed in the range of ₹136 to ₹140 per share. Being a book built issue, the final price will be discovered via book building process. Rocking Deals Circular Economy IPO has only a fresh issue component with no book built portion. In this case, it must be kept in mind that the fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership and  hence it is not EPS or equity dilutive. As part of the fresh portion of the IPO, Rocking Deals Circular Economy Ltd will issue a total of 15,00,000 shares (15 lakh shares), which at the upper IPO band price of ₹140 per share amounts to fresh issue of ₹21.00 crore. Since there is no offer for sale portion, the total size of the fresh issue will also comprise of 15.00 lakh shares, which at the upper price band of ₹140 per share will aggregate to ₹21.00 crore.

The minimum lot size for IPO investment is 1,000 shares. Thus, retail investors can invest a minimum of ₹140,000 (1,000 x ₹140 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 2,000 shares and having a minimum lot value of ₹280,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. Like any SME IPO, this issue also has a market making portion of 85,000 shares with SS Corporate Services Private Ltd as the market maker. Promoter stake in the company will dilute post IPO from 88.45% to 65.00%. Funds will be used for working capital needs and brand positioning. 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 SS Corporate Services Private Ltd.

Final subscription status of Rocking Deals Circular Economy IPO

Here is the subscription status of the Rocking Deals Circular Economy IPO as at close on 24th November 2023.

As can be seen from the above table, the overall IPO of Rocking Deals Circular Economy Ltd got subscribed an impressive 213.64 times. The HNI / NII portion led the stakes with 458.60 times subscription, followed by the Retail portion at 201.42 times subscription. Even the QIB portion got subscribed an impressive 47.38 times overall. That is a very strong and 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 all categories of investors.

Allocation quota for various categories

The issue was open for QIBs, retail investors, and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, the QIB and the HNI / NII segments. A total of 85,000 shares were allocated as market maker portion to SS Corporate Securities Private 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 Rocking Deals Circular Economy Ltd, the anchor allocation of 4.20 lakh shares comprising 28.00% of the total IPO size was done a day ahead of the IPO opening on November 21st, 2023. The entire allocation was done at the upper end of the price band of ₹140 per share (which comprises of the face value of ₹10 per share and a premium of ₹130 per share). The entire anchor allocation was spread across 4 anchor investors with two of the anchor investors getting 32.86% of the anchor allocation portion each and the other two getting 17.14% of the anchor allotment each. The market making portion of 5.67% 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. That has been reflected in the revised allocation in the table above.

How subscription built up for the Rocking Deals Circular Economy 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 Rocking Deals Circular Economy 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 Rocking Deals Circular Economy Ltd.

• The HNI / NII portion got the best subscription in the Rocking Deals Circular Economy Ltd IPO at 458.60 times and it got 14.19 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 201.42 terms overall and it got 26.42 times subscribed at the end of the first day.
   
• While the retail and HNI / NII portion getting fully subscribed on the first day of the IPO itself, it was only the QIB portion with lagged with just about 0.02 times subscription on the first day while the overall IPO also got fully subscribed at 16.35 times at the close of the first day of the IPO itself.
   
• The QIB, retail and HNI / NII portion saw the best traction on the last day of the IPO. The HNI / NII portion saw the total subscription ratio moving from 50.42X to 458.60X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 81.94X to 201.42X on the last day of the IPO.
   
• Just as the retail portion and the HNI portion saw the best incremental traction on the last day of the IPO, even the QIB portion saw the last day subscription jump from 8.49X to 47.38X. Similarly, even the overall IPO saw smart traction on the last day with the subscription ratio for the overall IPO moving from 54.46 to 213.64X on the last day.

With the IPO closed for subscription at the end of November 24th, 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 28th November 2023 while the refunds would be initiated on 29th November 2023. The shares of Rocking Deals Circular Economy Ltd (ISIN - INE0PTR01012) would be credited to the demat accounts of eligible shareholders by the close of 29th November 2023 while the stock of Rocking Deals Circular Economy Ltd is expected to be listed on 30th November 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.