Baazar Style Retail IPO: Anchor Allocation at 30.11%

About Baazar Style Retail IPO 

The Baazar Style Retail IPO is a book-built issue of ₹834.68 crores. The issue combines a fresh issue of 3,804,627 shares aggregating to ₹148.00 crores and an offer for sale of 17,652,320 shares aggregating to ₹686.68 crores. The price band is set at ₹370 to ₹389 per share. This includes the face value of ₹5 per share plus a share premium of ₹384 per share, taking the anchor allocation price to ₹389 per share. Let us focus on the anchor allotment portion ahead of the Baazar Style Retail IPO, which saw the anchor bidding opening and closing on 29th August 2024.

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A Brief on the Anchor Allocation of Baazar Style Retail IPO 

The anchor issue of Baazar Style Retail IPO saw a strong response on 29th August 2024, with 30.11% of the IPO size getting absorbed by the anchors. Out of 21,456,947 shares on offer, the anchors picked up 6,429,372 shares, accounting for 30.11% of the total IPO size. The anchor placement reporting was made to the BSE late on 29th August 2024, one working day ahead of the IPO opening on 30th August 2024.

The entire anchor allocation was made at the upper end of the price band of ₹389 per share. This includes the face value of ₹5 per share plus a share premium of ₹384 per share, taking the anchor allocation price to ₹389 per share. Let us focus on the anchor allotment portion ahead of the Baazar Style Retail IPO, which saw the anchor bidding open and close on 29th August 2024. After the anchor allocation, here is how the overall allocation looked:

Here, it must be noted that the 64,29,372 shares allocated to the anchor investors on 29th 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 quota reduced to the extent of the anchor allocation. As a result, the QIB quota has reduced from 65.24% before the anchor allocation to 35.13% 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 the 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, 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 Baazar Style Retail 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 Baazar Style Retail IPO 

On 29th August 2024, Baazar Style Retail 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 64,29,372 shares were allotted to 28 anchor investors. The allocation was done at the upper IPO price band of ₹389 per share, resulting in an overall anchor allocation of ₹250.10 crore. The anchors have already absorbed 30.11% of the total issue size of ₹834.68 crore, indicating strong institutional demand.

Below are the 25 anchor investors allotted 2% or more of the anchor allocation before the Baazar Style Retail IPO. The entire anchor allocation of ₹250.10 crore was spread across 28 major anchor investors, with 25 anchor investors getting 2% or more each out of the anchor allocation quota. These 25 anchor investors accounted for 96% of the total anchor allocation of ₹250.10 crore. The detailed allocation is captured in the table below. 

Key dates for Baazar Style Retail IPO and How to Apply? 

Baazar Style Retail IPO opens for subscription on 30th August 2024 and closes for subscription on 3rd September 2024 (both days inclusive). The basis of allotment will be finalized on 4th September 2024, and the refunds will be initiated on 5th September 2024. In addition, the demat credits are expected to happen on 5th September 2024, and the stock will be listed on 6th September 2024 on the NSE and the BSE. Baazar Style Retail will test the appetite for fashion retail stocks in India. The credits to the Demat account to the extent of shares allotted will happen by the close of 5th September 2024.

The issue combines a fresh issue of 3,804,627 shares aggregating to ₹148.00 crores and an offer for sale of 17,652,320 shares aggregating to ₹686.68 crores. The price band is set at ₹370 to ₹389 per share. The minimum lot size for an application is 38 Shares. The minimum amount of investment required by retail investors is ₹14,782. The minimum lot size investment for small NIIs is 14 lots (532 shares), amounting to ₹206,948, and for big NIIs, it is 68 lots (2,584 shares), amounting to ₹1,005,176.

Axis Capital Limited, Intensive Fiscal Services Private Limited, and JM Financial Limited are the book-running lead managers of the Baazar Style Retail IPO, while Link Intime India Private Ltd is the registrar for the issue.

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To apply for IPO through 5paisa, you can follow these steps:

1. Log in to your 5paisa  account 
2. Go to the IPO section and select the IPO you want to invest in 
3. Enter the number of lots and price you want to apply for 
4. Enter your UPI ID 
5. Review your details and click Submit 
6. Approve the UPI notification on your phone 

After you submit your bid, the exchange will approve it and you'll receive a notification to block funds in your UPI app. Once you approve the block request, the required amount will be deducted from your bank account. If your application is successful, shares will be credited to your Demat account on the allotment date.