Shri Techtex IPO Final Subscription Status

The SME IPO of Shri Techtex Ltd on the NSE Emerge segment closed on Friday, 28th July 2023. The IPO had opened for subscription on 26th July 2023. Let us look at the final subscription status of Shri Techtex Ltd at the close of subscription on 28th July 2023.

Key details pertaining to the Shri Techtex IPO

Shri Techtex IPO worth ₹45.14 crore, comprises entirely of a fresh issue with no offer for sale (OFS) component. The total SME IPO of Shri Techtex Ltd entails the issue of a total of 74 lakh shares which at the upper band of the price range at ₹61 per share aggregates to ₹45.14 crore. The stock has a face value of ₹10 and the book building price band has been set in the range of ₹54 to ₹61 per share. The final price is yet to be discovered but look at the robust response to the IPO, it does look like the pricing will be done at the upper end of the price band. The retail bidders can bid in minimum lot size of 2,000 share each. Thus, the minimum investment of ₹122,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the SME IPO of Shri Techtex Ltd.

HNIs can invest in 2 lots of 4,000 shares worth ₹244,000 as the bare minimum investment. There is no upper limit for the HNI / NII category. There is also no upper limit for the QIBs in this IPO. Shri Techtex Ltd will deploy the funds for construction of factory shed, commissioning of solar plant, purchase of machinery and for working capital needs. Post the IPO, the promoter equity in the company will get diluted from 100.00% to 70.34%. The issue is lead managed by Beeline Capital Advisors Private Ltd, while Link Intime India 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 28th July 2023.

Shri Techtex IPO Final Subscription Status

Here is the subscription status of the Shri Techtex Ltd IPO as at close on 28th July 2023. The total applications received have also been shown as a footnote to the allocation and subscription table.

As can be seen from the above table, the overall IPO of Shri Techtex Ltd was subscribed 148.36 times with the maximum oversubscription of 250.61 times coming from the HNI / NII bidders followed by the retail investors at 156.24 times. The Qualified Institutional Buyers (QIB) portion also got subscribed a healthy 58.03 times, which is quite robust for an SME IPO issue. This is the net portion after the allocation of the anchor shares to anchor investors.

The issue was only open for retail investors, QIBs and for the HNI / NIIs. There was a broad quote designed for each of the segments viz. the QIBs, the retail and the HNI NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

However, the above table also has a 28.38% anchor portion, which was completed one day prior to the IPO opening. A total of 21 lakh shares were allocated to the anchor investors at the upper end of the price band at ₹61 per share.

How did the oversubscription evolve over 3 days

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 Shri Techtex IPO.

It is clear from the above table that the retail portion got fully subscribed on the first day of the IPO itself, as did the HNI / NII portion and the QIB portion which all got subscribed fully on the first day of the IPO itself. By the close of the first day, the overall IPO had already been subscribed 7.67 times. All the 3 categories of investors viz., HNIs / NIIs, retail and QIB categories saw good traction and build up of interest on the last day of the IPO. There is an allocation of 372,000 shares to Sunflower Broking Ltd for market making, which has been shown separately in the allocation. The market maker typically offers buy and sell quotes at fine spreads post listing to ensure liquidity and low basis risk in the counter.

The IPO of Shri Techtex Ltd opened for subscription on 26th July 2023 and closed for subscription on 28th July 2023 (both days inclusive). The basis of allotment will be finalized on 02nd August 2023 and the refunds will be initiated on 03rd August 2023. In addition, the demat credits are expected to happen on 04th August 2023 and the stock is scheduled to list on 07th August 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.

A quick word on Shri Techtex Ltd and the SME IPO

Shri Techtex Ltd, is an SME IPO on the NSE which had opened for subscription on 26th July 2023. The company, Shri Techtex Ltd, was incorporated in the year 2011 to manufacture polypropylene (PP) non-woven fabrics in a variety of sizes and densities. Typically, the Polypropylene non-woven fabrics are used for a variety of ecological applications. They find applications in areas like organic farming, hospitals, healthcare services, nursing homes, home furnishing, industrial goods, consumer goods etc. The product has a fairly large institutional market where it finds a variety of applications.

Shri Techtex Ltd started off as a company trading in polymers and eventually graduated to becoming a full-fledged manufacturer of polypropylene (PP) woven fabric. It also undertakes manufacturing on a job-work basis on behalf of other manufacturers, which is part of its contract manufacturing franchise. The structure of the company underwent a change in the year 2018 when the contract manufacturing business was transferred to Aurum Fabritech. After that, the main company, Shri Techtex Lt is currently only engaged in one single line of product viz. polypropylene woven fabric.