Vishnu Prakash R Punglia IPO gets 29.71% anchor allocated

The anchor issue of Vishnu Prakash R Punglia IPO saw a robust response on 23rd August 2023 with 29.71% of the IPO size getting absorbed by the anchors. Out of the 3,12,00,000 (3.12 crore) shares on offer in the IPO, the anchors picked up 92,70,000 shares accounting for 29.71% of the total IPO size. The anchor placement reporting was made to the BSE late on Wednesday 23rd August 2023. The IPO of Vishnu Prakash R Punglia Ltd opens on 24th August 2023 in the price band of ₹94 to ₹99 and will close for subscription on 28th August 2023 (both days inclusive). The entire anchor allocation was made at the upper price band of ₹99; which is inclusive of the face value of the stock at ₹10 per share and an additional premium of ₹89 per share. Let us focus on the anchor allotment portion ahead of the Vishnu Prakash R Punglia Ltd IPO.

Process of anchor allotment ahead of IPO

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.

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 Vishnu Prakash R Punglia IPO

On 23rd August 2023, Vishnu Prakash R Punglia IPO completed the bidding for its anchor allocation. There was an enthusiastic response as the anchor investors participated through the process of book building. A total of 92,70,000 shares were allotted to a total of 13 anchor investors. The allocation was done at the upper IPO price band of ₹99 per share which resulted in an overall allocation of ₹91.77 crore. The anchors have already absorbed 29.71% of the total issue size of ₹308.88 crore, which is indicative of the robust institutional demand.

Listed below are the 13 anchor investors who got jointly allotted 100% of the total anchor allocation individually. The entire anchor allocation of ₹91.77 crore was spread across these 13 major anchor investors. These 13 anchor investors listed below accounted for 100% of the total anchor allocation of Vishnu Prakash R Punglia Ltd.

Data Source: BSE Filings

While the GMP has rallied sharply to ₹54 per share, it shows an attractive and aggressive premium of 54.55% on listing. This has led to reasonable anchor response with the anchors taking in 29.71% 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. Vishnu Prakash R Punglia Ltd has been a mix, getting good response from FPIs but it has also got extremely strong response from the domestic mutual funds and the domestic insurance companies, considering its product positioning in the Indian market. The number and spread of the Foreign Portfolio Investors have been fairly healthy although it has veered more towards arbitrage accounts and participatory notes. With strong SIP flows, most equity funds are flush with cash at this point of time and that has helped the MF appetite for anchor allocation in this IPO of Vishnu Prakash R Punglia Ltd. However, Quant AMC was the only AMCs to participate in the anchor allotment of Vishnu Prakash R Punglia Ltd.

Out of the total 92,70,000 shares allotted by way of anchor placement, Vishnu Prakash R Punglia Ltd allotted a total of 25,05,000 shares to 5 domestic mutual fund schemes across just 1 AMC i.e., Quant Mutual Fund. The mutual fund allocation represents 27.03% of the overall anchor allocation.

Read Vishnu Prakash R Punglia IPO

Brief background of Vishnu Prakash R Punglia Ltd

Vishnu Prakash R Punglia Ltd was incorporated in 1986 for designing and constructing infrastructure projects. The company has implemented infrastructure projects for the Central and State Governments; apart from autonomous bodies. It has operational presence in 9 States and 1 Union territory. Its operates in 4 verticals; Water Supply Projects (WSP), Railway Projects, Road Projects, and Irrigation Network Projects. The company is having accreditation with various government departments and agencies as a contractor, which facilitates the process of bidding. Some of the agencies where the company is already accredited include Jodhpur Development Authority, Public Health Engineering Department, Rajasthan, Water Resources Department, Rajasthan, Roads and Building Department, Gujarat, South Western Command, Military Engineering Services (MES) etc.

It recently forayed into 3 additional related business verticals. Vishu Prakash R Punglia Ltd has ventured into the tunnel business with the government thrust on infrastructure. The company drills and maintains tunnels for hydropower projects, railway passage, metro rail, roads, and highways in India. The second foray is into warehousing projects, especially for storage of food grains and other perishable materials. The company has executed several independent warehouse projects. Vishnu Prakash R Punglia Ltd has also forayed into sustainable sewerage projects. Sewerage projects are made sustainable, cost-effective, and low-maintenance; and also provides end-to-end wastewater management solutions.

The book running lead managers for the IPO of Vishu Prakash R Punglia Ltd will be Choice Capital Advisors Private Ltd and Pantomath Advisors Private Ltd. For managing shareholder records, Link Intime India Private Ltd will be the registrar to the issue.