Unicommerce eSolutions IPO: Anchor Allocation Hits 45%

About Unicommerce eSolutions IPO

The anchor allocation was made at the upper end of the price band of ₹108 per share. This includes the face value of ₹1 per share plus a share premium of ₹107 per share, taking the anchor allocation price to ₹108 per share. Let us focus on the anchor allotment portion ahead of the Unicommerce eSolutions IPO, which saw the anchor bidding open and close on 5 August 2024.

A brief on the Anchor Allocation of Unicommerce eSolutions IPO

The anchor issue of Unicommerce eSolutions IPO saw a strong response on 5th August 2024, with 45.00% of the IPO size getting absorbed by the anchors. Out of 25,608,512 shares on offer, the anchors picked up 11,523,831 shares, accounting for 45.00% of the total IPO size. The anchor placement reporting was made to the BSE late on Monday, 5th August 2024, one working day ahead of the IPO opening on Tuesday, 6th August 2024.

The entire anchor allocation was made at the upper end of the price band of ₹108 per share. This includes the face value of ₹1 per share plus a share premium of ₹107 per share, taking the anchor allocation price to ₹108 per share. Let us focus on the anchor allotment portion ahead of the Unicommerce eSolutions IPO, which saw the anchor bidding open and close on 5th August 2024. After the anchor allocation, here is how the overall allocation looked.
 

Here, it must be noted that the 11,523,831 shares allocated to the anchor investors on 5th August 2024 were reduced from the original QIB quota, and only the residual amount would be available to QIBs in the IPO. That change has been reflected in the table above, with the QIB IPO portion reduced to the extent of the anchor allocation. As a result, the QIB quota has reduced from 75.00% before the anchor allocation to 30.00% after the anchor allocation. The overall allocation to QIBs includes the anchor portion, so the allotted anchor shares have been deducted from the QIB quota for 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 differs 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 just gives investors confidence that large, established institutions back the issue. The presence of institutional investors like mutual funds and foreign portfolio investors (FPIs) gives confidence to retail investors. Here are details of the anchor lock-in for the Unicommerce eSolutions issue.

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 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 the 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 mutual fund, insurance company, or sovereign fund, which invests before the IPO is made available to the public as per SEBI regulations. The 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 the price discovery of the IPO.

Anchor Allocation investors in Unicommerce eSolutions IPO

On 5th August 2024, Unicommerce eSolutions completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated in the book-building process. A total of 11,523,831 shares were allotted to anchor investors. The allocation was done at the upper IPO price band of ₹108 per share (including a premium of ₹107 per share), resulting in an overall anchor allocation of ₹124.46 crore. The anchors have already absorbed 45.00% of the total issue size of ₹276.57 crore, indicating strong institutional demand.

Below are the anchor investors allotted shares in the anchor allocation before Unicommerce eSolutions IPO. The entire anchor allocation of ₹124.46 crore was spread across major anchor investors. While there were multiple anchor investors, only those allocated a significant portion of the anchor quota are listed in the table below. These anchor investors accounted for a substantial part of the total anchor allocation of ₹124.46 crore. The detailed allocation is captured in the table below. The table below is indexed descending on the size of anchor allocation in terms of the number of shares.
 

The above list includes the anchor investors who were allotted significant shares of the anchor portions ahead of the Unicommerce eSolutions IPO. The detailed and comprehensive report on the anchor allocation with the mutual fund portion separated can be accessed on the BSE website.
Overall, the anchors absorbed 45.00% of the total issue size. The QIB portion in the IPO has already been 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. Unicommerce eSolutions saw a lot of buying interest from all categories of anchors, viz. FPIs, participatory notes routed through ODIs, domestic mutual funds, AIFs, and insurance companies. Finally, look at the sub-category of mutual fund participation in the anchor allocation ahead of the Unicommerce eSolutions IPO.
The anchor response normally sets the tone for retail participation in the IPO, which has been very strong this time. Out of the 11,523,831 shares allocated to the anchors in the IPO, a significant portion was allocated to domestic mutual funds registered with SEBI. This allocation was spread across multiple mutual fund schemes belonging to various asset management companies (AMCs) in India. The mutual fund allocation in the anchor portion amounted to a substantial percentage of the total anchor size.

Key dates for Brainbees Solutions and How to Apply?

The issue opens for subscription on 6th August 2024 and closes for subscription on 8th August 2024 (both days inclusive). The basis of allotment will be finalized on 9th August 2024, and the refunds will be initiated on 12th August 2024. In addition, the demat credits are expected to happen on 12th August 2024, and the stock will be listed on 13th August 2024 on the NSE and the BSE. Unicommerce eSolutions will test the appetite for new-age e-commerce and omnichannel retail stocks in India. The credits to the Demat account to the extent of shares allotted will happen by the close of 12th August 2024.

The issue is an offer for sale of 25,608,512 shares aggregating to ₹276.57 crore. The price band is set at ₹102 to ₹108 per share. The minimum lot size for an application is 138 Shares. The minimum amount of investment required by retail investors is ₹14,904. The minimum lot size investment for small NIIs is 14 lots (1,932 shares), amounting to ₹208,656; for big NIIs, it is 68 lots (9,384 shares), amounting to ₹1,013,472.

IIFL Securities Ltd and CLSA India Private Limited are the book-running lead managers of the Unicommerce eSolutions IPO. At the same time, Link Intime India Private Ltd is the registrar for the issue.