Vishnu Prakash R Punglia IPO subscribed 87.82 times at close

The ₹308.88 crore IPO of Vishnu Prakash R Punglia Ltd, consisted entirely of a fresh issue shares and there was no offer for sale (OFS) component in the issue. The fresh issue was to the tune of ₹308.88 crore which was also the overall size of the IPO of Vishnu Prakash R Punglia Ltd. The IPO pricing was done in the band of ₹94 to ₹99 with the final price to be discovered through the process of book building. While the QIB portion only picked up traction on the last day, the retail portion and the HNI / NII portion got fully subscribed on the first day of the IPO itself. In fact, even the overall IPO had been oversubscribed nearly 3.81 times at the close of the first day of the IPO itself. The table below captures the day-wise build-up of the IPO subscription of Vishnu Prakash R Punglia IPO.

As can be seen, in the table above, the QIB portion built its entire heft on the last day of the IPO while the NII and retail portion saw gradual build-up. Even the employee quota got subscribed 12.97 times.

Quick update on the overall IPO response

The IPO saw fairly steady response on Day-1 and Day-2 of the IPO and closed with very  healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, Vishnu Prakash R Punglia Ltd IPO was subscribed 87.82X overall, with best demand coming from the QIB segment, followed by the HNI / NII segment and the retail segment in that order. In fact, the institutional segment saw some very good traction on the last day, which is normal since institutional bids typically come in on the last day only. 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 got fully subscribed on Day-1 and built up heft gradually. Firstly, let us look at the details of overall allocation across different categories of investors in the IPO.

As of close of 28th August 2023, out of the 219.30.13 lakh shares on offer in the IPO, Vishnu Prakash R Punglia Ltd saw bids for 19,257.86 lakh shares. This implies an overall subscription of 87.82X overall. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII 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

Let us first talk about the pre-IPO anchor placement. On 23rd August 2023, Vishnu Prakash R Punglia Ltd did an anchor placement with 29.71% of the IPO size getting absorbed by the anchors. Out of the 3,12,00,000 shares on offer, 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 23rd August 2023. The IPO of Vishnu Prakash R Punglia Ltd opened on 24th August 2023 in the price band of ₹94 to ₹99 and closed for subscription on 28th August 2023 (both days inclusive). The entire anchor allocation was made at the upper price band of ₹99 (comprising of face value of ₹10 and stock premium of ₹89 per share. Here are the details of the anchor allocation across the 13 anchor investors who accounted for 100% of the anchor allocation portion of Vishnu Prakash R Punglia IPO.

Data Source: BSE Filings

The QIB portion (net of anchor allocation as explained above) had a quota of 61.80 lakh shares of which it has got bids for 10,610.60 lakh shares at the close of Day-3, implying a subscription ratio of 171.69X 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 Vishnu Prakash R Punglia 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 111.03X (getting applications for 5,146.37 lakh shares against the quota of 46.35 lakh shares). That is a very 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 112.02X while the below ₹10 lakh bid category (S-HNIs) got subscribed 109.06X. 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 a healthy 32.01X at the close of Day-3, showing steady to strong retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 108.15 lakh shares on offer, valid bids were received for 3,462.00 lakh shares, which included bids for 2,876.20 lakh shares at the cut-off price. The IPO is priced in the band of (₹94 to ₹99) and has closed for subscription as of the close of Monday, 28th August 2023.

Brief on the business model of Vishnu Prakash R Punglia Ltd

Vishnu Prakash R Punglia Ltd was incorporated in the year 1986 to undertake the business of designing and constructing infrastructure projects. The company has implemented such infrastructure projects for Central and State Governments; apart from autonomous bodies and private bodies. It has operational presence across 9 States and 1 Union territory in India. The 4 key business lines of Vishnu Prakash R Punglia Ltd can be divided into; Water Supply Projects (WSP), Railway Projects, Road Projects, and Irrigation Network Projects. The company is accredited with various government departments and agencies as a contractor for such works. These accredited bodies 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.

The company has made some additional business forays of late. Vishu Prakash R Punglia Ltd has ventured into the tunnel business with the government thrust on infrastructure. The company makes tunnels for hydropower, railways, metro rail, roads, and highways in India. It looks to capture lucrative growth opportunities in the tunnel sector. The second foray is into warehousing projects, especially for the storage of food grains and other perishable materials. It has also executed several independent warehouse projects as part of the government food chain logistics plan. Finally, it also forayed into sustainable sewerage projects. Sewerage projects are made sustainable, cost-effective, and low-maintenance. Vishu Prakash R Punglia Ltd also provides end-to-end wastewater management solutions.

The public issue of Vishu Prakash R Punglia Ltd will be lead managed by 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.