Sahaj Fashions IPO Final Subscription Status

The IPO of Sahaj Fashions Ltd closed on Tuesday, 29th August 2023. The IPO had opened for subscription on 25th August 2023. Let us look at the final subscription status of Sahaj Fashions Ltd at the close of subscription on 29th August 2023. It was a fixed price IPO and the IPO price had already been fixed at ₹30 per share. The stock has a face value of ₹10.

About the Sahaj Fashions IPO

Sahaj Fashions IPO worth ₹13.96 crore comprises of a fresh issue and an offer for sale (OFS) component. The Fresh Issue portion of Sahaj Fashions Ltd entails the issue of 44.76 lakh shares which at the fixed IPO price of ₹30 per share aggregates to ₹13.43 crore. The offer for sale (OFS) portion of Sahaj Fashions Ltd entails the issue of 1.76 lakh shares which at the fixed IPO price of ₹30 per share aggregates to ₹0.53 crore. Therefore, the overall size of the IPO of Sahaj Fashions Ltd entails the issue of 46.52 lakh shares which at the fixed IPO price of ₹30 per share aggregates to ₹13.96 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 4,000 share each. Thus, the minimum investment of ₹120,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs / NIIs can invest in a minimum of 2 lots of 8,000 shares worth ₹240,000 as the bare minimum investment. There is no upper limit for the HNI / NII category or even for the QIB category. Sahaj Fashions Ltd will deploy the funds for working capital needs and for prepayment / repayment of certain secured loans as well as for general corporate purposes. Post the IPO, the promoter equity in the company will get diluted from 97.95% to 64.66%. The issue is lead managed by Khambatta Securities 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 29th August 2023.

Final subscription status of Sahaj Fashions IPO

Here is the subscription status of the Sahaj Fashions IPO as at close on 29th August 2023.

The issue was open for retail investors, QIBs and for the HNI / NIIs. There was a broad quota designed for the retail and the non-retail. The non-retail quota permitted HNI / NIIs and the QIBs to invest in the IPO. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 2,36,000 shares were allocated as market maker portion to NNM Securities Ltd, which will act as a market maker 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. Here is how the allocation was done for the IPO across market, retail, and non-retail.

As can be seen, from the above table, the company has not made any allocation to the anchor investors, with no quota anyways dedicated to the QIB investors. Nearly 5.07% of the issue was reserved for the market makers, to provide buy and sell two-way quotes to ensure liquidity in the counter after listing. The market makers offer liquidity on both sides and reduce the basis risk in the counter. The balance shares were divided equally among the retail investors and the non-retail investors, predominantly comprising of HNIs / NIIs and to a lesser extent institutions too. Since there was no anchor allocation in the IPO, there was no anchor bidding one day prior to the opening of the IPO.

How subscription built up for Sahaj Fashions IPO

The oversubscription of the IPO was dominated by the HNI / NIIs followed by the retail investors and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Sahaj Fashions IPO.

It is clear from the above table that while the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion got fully subscribed only on the second day of the IPO. Both the segments saw strong traction on the last and final day of the IPO i.e., on August 29, 2023. The HNI / NII portion sees the funding applications and the corporate applications come in on the last day. There is an allocation of 236,000 shares to NNM Securities Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

Sahaj Fashions IPO opened for subscription on 25th August 2023 and closed for subscription on 29th August 2023 (both days inclusive). The basis of allotment will be finalized on 01st September 2023 and the refunds will be initiated on 04th September 2023. In addition, the demat credits are expected to happen on 05th September 2023 and the stock is scheduled to list on 06th September 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.

Read more about Sahaj Fashions

A quick word on Sahaj Fashions Ltd and the SME IPO

Sahaj Fashions Ltd was incorporated in 2011 to manufacture fabric for garment making, home furnishings, and a variety of industrial applications. Apart from manufacturing cotton suiting and shirting fabric, Sahaj Fashions Ltd also makes polyester-based and cotton-polyester blended fabrics. Its product that is in high demand from the garments manufacturers is the cotton yarn-dyed fabrics. Its product catalogue comprises of Piece dyed shirting, cotton yarn dyed shirting, Chambray, Self-designed shirting, Lycra and linen fabrics, cotton duck fabric, drill, and twill fabric. It has its manufacturing unit located on the Kishangarh Bhilwara Express Highway, near Ajmer in Rajasthan.

The company has built a complete infrastructure ecosystem for top class performance and delivery to customers. It has high speed air jet looms, compressors for supply of best quality air, humidification plant to suit cotton fabrics manufacturing at high speed and a lot more. For the weaving preparatory jobs, the company has installed sectoral warping machines, apart from two direct warping machines for cone unwinding and warping. Sizing of all types of yarn is done through PLC based sizing machines while there is also a complete DG set power back-up system to ensure uninterrupted power supply to the unit.

The company has been promoted by Rohit Toshniwal, Sadhana Toshniwal, and others. The promoter holding in the company currently stands at 97.95%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will reduce. The fresh issue funds will be used by the company for meeting its working capital funding gaps and for prepayment of certain secured borrowings. Part of the funds raised will also go towards general corporate expenses. While Khambatta Securities Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is NNM Securities Ltd.