SignatureGlobal India IPO gets 43.63% Anchor Allocated

About the SignatureGlobal India IPO

The anchor issue of SignatureGlobal India IPO saw a relatively strong response on 18th September 2023 with 43.63% of the IPO size getting absorbed by the anchors. Out of the 1,89,61,039 shares (189.61 lakh shares approximately) on offer, the anchors picked up 82,72,700 shares (82.73 lakh shares approximately) accounting for 43.63% of the total IPO size. The anchor placement reporting was made to the BSE late on Monday, September 18th, 2023; one working day ahead of the IPO opening. The IPO of SignatureGlobal India Ltd opens on 20th September 2023 in the price band of ₹366 to ₹385 and will close for subscription on 22nd September 2023 (both days inclusive).

The entire anchor allocation was made at the upper price band of ₹385. This includes the face value of ₹1 per share plus a premium of ₹384 per share, taking the anchor allocation price to ₹385 per share. Let us focus on the anchor allotment portion ahead of the SignatureGlobal India Ltd IPO, which saw the anchor bidding opening and also closing on 18th September 2023. Before that, here is how the overall allocation will look.

The overall allocation to QIBs includes the anchor portion, so the anchor shares allotted will be deducted from the QIB quota for the purpose of the public issue.

Finer points of anchor allocation process

Before we go into the details of the actual anchor allotment, a quick word on the process of anchor placement. The anchor placement ahead of an IPO/FPO is different from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. It is just to give confidence to investors that the issue is backed by large established institutions. Here are details of the anchor lock-in for the issue of SignatureGlobal India IPO.

However, the anchor investors cannot be allotted shares at a discount to the IPO price. This is explicitly stated in the SEBI revised regulations as under, “As per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, in case the Offer Price discovered through book building process is higher than the Anchor Investor Allocation Price, then the Anchor investors will be required to pay the difference by the pay-in as specified in the revised CAN.

An anchor investor in an IPO is normally a qualified institutional buyer (QIB) like a foreign portfolio investor or mutual fund or insurance company or a sovereign fund which invests before the IPO is made available to the public as per SEBI regulations. Anchor portion is part of the public issue, so the IPO portion to the public (QIB portion) is reduced to that extent. As initial investors, these anchors make the IPO process more attractive for investors, and instil confidence in them. Anchor investors also largely aid in price discovery of the IPO

Anchor placement story of SignatureGlobal India IPO

On 18th September 2023, SignatureGlobal India IPO completed the bidding for its anchor allocation. There was a strong and robust response as the anchor investors participated through the process of book building. A total of 82,72,700 shares were allotted to a total of 19 anchor investors. The allocation was done at the upper IPO price band of ₹385 per share (including premium of ₹384 per share) which resulted in an overall allocation of ₹318.50 crore. The anchors have already absorbed 43.63% of the total issue size of ₹730 crore, which is indicative of fairly robust institutional demand.

Listed below are the 13 anchor investors who got allotted shares of more than 3% of the anchor portion as part of the overall anchor allocation quota for the IPO of SignatureGlobal India Ltd. The entire anchor allocation of ₹318.50 crore was spread across 19 major anchor investors, of which just 1 anchor investor accounted for more than 22% of the anchor allocation quota. These 13 anchor investors listed below accounted for 89.34% of the total anchor allocation of SignatureGlobal India Ltd and their participation will set the tone for retail participation in the IPO.

Data Source: BSE Filings

While the GMP has been rather steady at ₹34 per share, it shows a rather moderate to strong premium of 8.83% on listing. This has led to reasonable anchor response with the anchors taking in 43.63% of the total issue size. The QIB portion in the IPO will be reduced to the extent of the anchor placement done above. Only the balance amount will be available for QIB allocation as part of the regular IPO.

The general norm is that, in anchor placements, smaller issues find it hard to get FPIs interested while larger issues do not interest mutual funds. SignatureGlobal India Ltd has witnessed anchor interest from domestic mutual funds, foreign portfolio investors, and even insurance companies.

SignatureGlobal India Ltd, in consultation with the book running lead managers (BRLMs) have allocated a total of 24,67,530 shares to domestic mutual funds, spread across 5 mutual fund schemes of 3 mutual fund AMCs. The mutual fund allocation alone is 29.83% of the total anchor book of SignatureGlobal India Ltd with an investment value of ₹95 crore.

Read about SignatureGlobal India IPO

Brief on the SignatureGlobal India Ltd business model

SignatureGlobal (India) Ltd is a well-established brand with a strong presence in Delhi-NCR region, and is known for innovative construction technologies, amenities & affordable prices. SignatureGlobal (India) Ltd commenced operations in 2014 with the launch of Solera project in Gurugram, Haryana. Since then, the company has already sold 27,965 residential and commercial units in Delhi NCR region. Its focus is predominantly on the affordable housing and middle-income housing segment. It provides value homes with attractive designs and amenities via community facilities. SignatureGlobal (India) Ltd has adopted an integrated real estate development model, handling the project from concept to completion. Its control over multiple process pegs, including centralized raw material procurement system, has resulted in cost efficiencies.

Most of its properties developed are also environmentally responsible projects. For example, its projects enhance green cover through sustainable practices like common area lighting with solar panels, LED lights, high-performance glass with light transmission that ensure better cooling and energy savings. SignatureGlobal (India) Ltd has broadly replicated its business model across the micro-markets in Delhi-NCR, with focus on Gurugram. In order to ensure rapid growth and scalability, the company relies on standardized design, technical specifications, and layout plans. A focus on the mid-market means that the company has maintained its business growth even amidst tough market conditions.

The fresh funds from the IPO will be used by SignatureGlobal India Ltd for prepayment of certain borrowings availed and for infusion of funds into select subsidiaries. Part of the fresh funds will also be used to bankroll the inorganic growth of the business through acquisitions. The issue will be lead managed by ICICI Securities, Axis Capital, and Kotak Mahindra Capital. Link Intime India Private Ltd will be the registrar to the issue.