Vraj Iron & Steel IPO Subscription Status

Tanushree Jaiswal

Last Updated: 27th June 2024 - 07:34 pm

Vraj Iron and Steel IPO Subscription Status on Day-2 at 16.91 times

As of 5.05 pm on 27th June 2024, out of the 61.385 lakh shares on offer in the IPO (excluding anchor portion), Vraj Iron and Steel saw bids for 1,038.28 lakh hares. This implies an overall subscription of 16.91X at a macro level. The granular break-up of subscriptions as of the close of the second day of the Vraj Iron and Steel IPO was as follows:

Employees (N.A.)

QIBs (0.91X)

HNI / NII (32.52X)

Retail (19.37X)

The subscriptions were led by the HNI / NII investors followed by the Retail investors and the QIB investors in that order. QIB bids and NII bids typically gather most of the momentum on the last day, and that would be the case in this issue also in the case of QIB bids. Both the QIB and the NII bids pick momentum on the last day since that is when the bulk HNI funding bids, corporate bids and the bulk QIB bids come in. Here are the details of the category-wise subscription. The overall subscription excludes anchor portion.

Investor Category	Subscription (times)	Shares Offered	Shares Bid For	Total Amount (₹ in Crore)
Anchor Investors	1.00	24,78,259	24,78,259	51.30
Employee Quota	1.00	0	0	0.00
QIB Investors	0.91	17,53,846	15,97,032	33.06
HNIs / NIIs	32.52	13,15,385	4,27,78,440	885.51
Retail Investors	19.37	30,69,231	5,94,52,704	1,230.67
Total	16.91	61,38,462	10,38,28,176	2,149.24

Data Source: BSE

The IPO is open up to June 28th, 2024, at which point we will know the final subscription status of the IPO. As of today, the IPO subscription data is only updated as of the end of Day-2 of the IPO.

Vraj Iron and Steel IPO Subscription Status on Day-1 at 3.46 times

As of 5.05 pm on 26th June 2024, out of the 61.385 lakh shares on offer in the IPO (excluding anchor portion), Vraj Iron and Steel saw bids for 212.28 lakh shares. This implies an overall subscription of 3.46X at a macro level. The granular break-up of subscriptions as of the close of the first day of the Vraj Iron and Steel IPO was as follows:

Employees (N.A.)

QIBs (0.61X)

HNI / NII (3.53X)

Retail (5.05X)

The subscriptions were led by Retail investors followed by HNI / NII investors and then QIB investors. QIB and NII bids typically gather momentum on the last day, given the bulk of HNI, corporate bids, and QIB bids come in. Here are the details of the category-wise subscription. The overall subscription excludes the anchor portion.

Investor Category	Subscription (times)	Shares Offered	Shares Bid For	Total Amount (₹ in Crore)
Anchor Investors	1.00	24,78,259	24,78,259	51.30
Employee Quota	N.A.	N.A.	N.A.	N.A.
QIB Investors	0.61	17,53,846	10,70,424	22.16
HNIs / NIIs	3.53	13,15,385	46,44,936	96.15
Retail Investors	5.05	30,69,231	1,55,12,616	321.11
Total	3.46	61,38,462	2,12,27,976	439.42

Data Source: BSE

The IPO is open up to June 28th, 2024, at which point we will know the final subscription status of the IPO. As of today, the IPO subscription data is only updated as of the end of Day-1 of the IPO.

Vraj Iron and Steel - Share Allocation Across Categories

The anchor issue of Vraj Iron and Steel saw a relatively strong response on 25th June 2024 with 28.76% of the IPO size getting absorbed by the anchors. Out of 86,16,721 shares (86.17 lakh shares approximately) on offer, the anchors picked up 24,78,259 shares (24.78 lakh shares approximately) accounting for 28.76% of the total IPO size. The anchor placement reporting was made to the BSE late on Tuesday, 25th June 2024; one working day ahead of the IPO opening on Wednesday, 26th June 2024.

The entire anchor allocation was made at the upper price band of ₹207 per share. This includes the face value of ₹10 per share plus a share premium of ₹197 per share, taking the anchor allocation price to ₹207 per share. Let us focus on the anchor allotment portion

Category of Investors	Allocation of Shares Under IPO
Reservation for Employees	No quota reserved for employees
Anchor Allocation	24,78,259 shares (28.76% of the total IPO offer size)
QIB Shares Offered	17,53,846 shares (20.35% of the total IPO offer size)
NII (HNI) Shares Offered	13,15,385 shares (15.27% of the total IPO offer size)
Retail Shares Offered	30,69,231 shares (35.62% of the total IPO offer size)
Total Shares Offered	86,16,721 shares (100.00% of total IPO offer size)

Data Source: Company RHP / BSE

Here it must be noted that the 24,78,259 shares allocated to the anchor investors on 25th June 2024, were actually 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 available in the IPO has reduced from 49.11% before the anchor allocation to 20.35% after the anchor allocation. The overall allocation to QIBs includes the anchor portion, so the anchor shares allotted has been deducted from the QIB quota for the purpose of the public issue.

The total anchor allocation was worth ₹51.30 crore and was spread across 6 anchor investors. All the anchor investors got more than 9% allocation of the anchor quota each at the bare minimum. The anchor bidding opened and also closed on the same day; June 25, 2024. Out of the total anchor allocation, half of the anchor allocated shares will be locked in for a period of 30 days till July 29, 2024; while the balance 50% will be locked in for a period of 3 months up to September 27, 2024.

About Vraj Iron and Steel IPO

The stock of Vraj Iron and Steel has a face value of ₹10 per share and the price band for the book building IPO has been set in the range of ₹195 to ₹207 per share. The IPO of Vraj Iron and Steel will be entirely a fresh issue of shares with no offer for sale (OFS) component. The fresh issue brings in fresh funds into the company, but is also EPS and equity dilutive. The OFS is just a transfer of ownership; and hence neither EPS nor equity dilutive. The fresh issue portion of the IPO of Vraj Iron and Steel comprises the issue of 82,60,870 shares (82.61 lakh shares approximately), which at the upper price band of ₹207 per share will translate into a fresh issue size of ₹171.00 crore.

Since there is no offer for sale component in the IOP, the fresh issue size will double up as the overall IPO size too. Therefore, the total IPO of Vraj Iron and Steel will also comprise of a fresh issue of 82,60,870 shares (82.61 lakh shares approximately) which at the upper end of the price band of ₹207 per share aggregates to total issue size of ₹171.00 crore. The IPO of Vraj Iron and Steel will be listed on the NSE and the BSE on the IPO mainboard.

The IPO of Vraj Iron and Steel is entirely a fresh issue, and the funds will be used funding capex at Bilaspur plant, repayment of borrowings and for general corporate expenses. The promoters of the company are Gopal Sponge and Power Private Ltd, VA Transport Private Ltd and Vijay Anand Jhawar. The promoters hold 99.99% stake in the company, which will get diluted post the IPO to 74.95%. The IPO will be lead managed by Aryaman Financial Services Ltd; while Bigshare Services Ltd will be the IPO registrar.

Next Steps in the Vraj Iron and Steel IPO

The issue opens for subscription on 26th June 2024 and closes for subscription on 28th June 2024 (both days inclusive). The basis of allotment will be finalized on 01st July 2024 and the refunds will be initiated on 02nd July 2024. In addition, the demat credits are expected to also happen on 02nd July 2024 and the stock will list on 03rd July 2024 on the NSE and the BSE. The credits to the demat account to the extent of shares allotted will happen by the close of 02nd July 2024 under ISIN (INE0S2V01010).

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