SignatureGlobal India IPO subscribed 11.88 times at close

The ₹730 crore IPO of SignatureGlobal India Ltd, consisted of a combination of fresh issue and offer for sale. The fresh issue was to the tune of ₹603 crore while the offer for sale (OFS) was worth ₹127 crore. The IPO pricing was done in the band of ₹366 to ₹385 per share with the final price to be discovered through the process of book building. While the QIB portion picked up traction on the last day, the overall journey was quite slow. In fact, the QIB portion got fully subscribed only on the last day of the IPO. However, the HNI / NII portion got fully subscribed on the first day of the IPO itself while the retail portion got subscribed on the second day. The overall IPO got fully subscribed on the second day of the IPO. The table below captures the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 11.88 times subscribed at the close of the third and final day of the IPO on 22nd September 2023.

Rapid update on the overall IPO response

The IPO saw fairly tepid and lacklustre progress on Day-1 and Day-2 of the IPO and closed with relatively modest to healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed only on the second day of the IPO, with the retail portion getting fully subscribed on the second day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, SignatureGlobal India Ltd IPO was subscribed 11.88X overall, with best demand coming from the HNI / NII segment, followed by the QIB segment and the retail segment in that order. In fact, the institutional segment saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion was relatively timid and got fully subscribed only on the second day of the IPO. Firstly, let us look at the details of overall allocation.

As of close of 22nd September 2023, out of the 112.43 lakh shares on offer in the IPO, SignatureGlobal India Ltd saw bids for 1,336.05 lakh shares. This implies an overall subscription of 11.88X for the IPO. The granular break-up of subscriptions was in favour of the HNI / NII investors followed by the QIB investors while the retail portion got the lowest subscription among the various categories. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Subscription status of QIB Portion

On 18th September 2023, SignatureGlobal India Ltd 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 (including premium of ₹384 per share) which resulted in an overall allocation of ₹318.50 crore. The anchors absorbed 43.63% of the total issue size of ₹730 crore. Listed below are the 13 anchor investors who got allotted more than 3% each of the anchor shares in the IPO of SignatureGlobal India Ltd. These 13 anchor investors listed below accounted for 89.34% of the total anchor allocation of SignatureGlobal India Ltd; setting  the tone for retail participation in the IPO.

Data Source: BSE Filings

The QIB portion (net of anchor allocation as explained above) had a quota of 62.57 lakh shares of which it has got bids for 795.09 lakh shares at the close of Day-3, implying a subscription ratio of 12.71X 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 SignatureGlobal India Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 13.54X (getting applications for 404.99 lakh shares against the quota of 29.92 lakh shares). That is a relatively strong 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 visible as the overall HNI / NII portion added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 15.78X while the below ₹10 lakh bid category (S-HNIs) got subscribed 9.06X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed 6.82X at the close of Day-3, showing relatively moderate appetite. It must be noted that retail allocation is 10% in this IPO. For retail investors; out of the 19.95 lakh shares on offer, valid bids were received for 135.97 lakh shares, which included bids for 109.49 lakh shares at the cut-off price. The IPO is priced in the band of (₹366 to ₹385) and has closed for subscription as of the close of Friday, 22nd September 2023.

Brief on the business model of SignatureGlobal India Ltd

SignatureGlobal (India) Ltd is a well-established real estate development 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.