Indegene IPO Subscribed 69.91 times

About Indegene IPO

The stock of Indegene IPO has a face value of ₹2 per share and the price band for the book building IPO has been set in the range of ₹430 to ₹452 per share. The IPO of Indegene will be a combination of a fresh issue of shares and offer for sale (OFS). The fresh issue portion of the IPO of Indegene Ltd comprises the issue of 1,68,14,159 shares (168.14 lakh shares approximately), which at the upper price band of ₹452 per share will translate into a fresh issue size of ₹760 crore. The offer for sale (OFS) portion of the Indegene IPO comprises the sale / offer of 2,39,32,732 shares (239.33 lakh shares approximately), which at the upper price band of ₹452 per share will translate into an OFS size of ₹1,081.76 crore.

Out of the OFS size of 239.33 lakh shares, 3 individual shareholders (Manish Gupta, Rajesh Nair, and Anita Nair) will offer 55.04 lakh shares in all. In addition, among the investor shareholders; Vida Trustees will offer 36 lakh shares, BPC Genesis Fund-I will offer 26.58 lakh shares, BPC Genesis Fund-IA will offer 13.79 lakh shares and CA Dawn Investments will offer 107.93 lakh shares. All selling will be by investor shareholders, since the company is professionally managed and does not identify with a promoter group. Thus, the total IPO of Indegene Ltd will comprise of a fresh issue and an OFS of 4,07,46,891 shares (407.47 lakh shares approximately) which at the upper end of the price band of ₹452 per share aggregates to total issue size of ₹1,841.76 crore. However, this could be subject to marginal changes in the final analysis and hence the final allocation table could slightly differ. The IPO of Indegene Ltd will be listed on the NSE and the BSE on the IPO mainboard.

The fresh funds will be used for funding capex of Indegene Ltd and its material subsidiaries, repayment of loans of group companies and to fund inorganic growth. The company, being a professionally managed company, does not have an identified promoter group. The IPO will be lead managed by Kotak Mahindra Capital, Citigroup Global Markets, JP Morgan India, and Nomura Financial Advisory; while Link Intime India Private Ltd will be IPO registrar.

Read more about Indegene IPO

How subscriptions evolved in the IPO period?

While the QIB portion and the HNI / NII portion picked up traction on the last day, the overall journey was relatively tepid for the retail investors. In fact, the QIB portion got fully subscribed only on the second day of the IPO while the retail portion and the HNI portion got fully subscribed on the first day of the IPO itself. The overall IPO, as a result, also saw the subscription book filling up on the first day of the IPO, although most of the traction of institutions and HNIs was only visible on the third and final day of the IPO on 08th May 2024. The IPO was kept open for a total period of 3 consecutive trading days. While the retail portion did start off strong, the eventual traction slowed in the subsequent days, which is the general norm for retail. In terms of subscription ratio, the retail portion subscription trailed behind the QIB and the HNI / NII portion respectively. Here is the day-wise progress in IPO subscription of the total available quota. The oversubscription in the table below represents the oversubscription; net of the anchor allocation of shares, done one working day prior to the opening of the IPO.

Data Source: BSE

As can be seen from the above table, the overall IPO got 69.91 times subscribed at the close of the third and final day of the IPO on 08th May 2024. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got 0.05 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 5.45X to 197.55X.
   
• The HNI / NII portion got 4.25 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 18.44X to 55.07X.
   
• Retail portion got 1.56 times subscribed at the end of the first day of the IPO. However, on the third and final day of the IPO, the subscription moved from 3.94X to 7.95X.
   
• The overall IPO got 1.70 times subscribed at the end of the first day of the IPO. However, on third and final day of the IPO, overall subscription moved from 7.44X to 69.91X.

Rapid update on the overall IPO response

The IPO saw fairly modest response on the Day-1 and Day-2, with most of the action visible only on Day-3 of the IPO, as is normally the case. However, the IPO did close with relatively healthy subscription numbers at the close of Day-3. In fact, the IPO of Indegene Ltd got fully subscribed on the first day of the IPO itself, thanks to the traction in retail and HNI / NII portions. As per the combined bid details put out by the BSE at the close of Day-3, Indegene Ltd IPO was subscribed 69.91X 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 QIB segment and the HNI / NII segments saw some very good traction on the last day. 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 was relatively less aggressive on the last day, although it was fully subscribed on Day-2 of the IPO, but subsequent traction was a tad lower in comparison. Firstly, let us look at the details of overall allocation of shares to various categories of investors. It may be noted that in the final allocation of shares, minor variations are normal as part of intra-segment adjustments. These, however, do not impact the total number of shares materially.

Data Source: BSE

Having understood the allocation of shares across various categories, Let us look at how the subscription data played out for the IPO at an overall level and at a more granular level.

As of close of 08th May 2024, out of the 288.67 lakh shares on offer in the IPO, Indegene Ltd saw bids for 20,181.78 lakh shares. This implies an overall subscription of 69.91X at a macro level. The granular break-up of subscriptions was in favour of the QIB segment followed by the HNI / NII investors and the Retail investors in that order. 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. The overall subscription is exclusive of the anchor portion.

Data Source: BSE

Subscription status of QIB Portion

On 03rd May 2024, Indegene Ltd completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated through the process of book building. A total of 1,21,41,102 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹452 per share (including premium of ₹450 per share) which resulted in an overall allocation of ₹548.78 crore. The anchors absorbed 29.61% of the total issue size of ₹1,853.55 crore.  It may be noted that half the anchor portion is locked for 1 month from the date of allotment i.e. up to June 08th, 2024. The other 50% is locked for 3 months from the date of allotment i.e., up to August 07th 2024.

The QIB portion (net of anchor allocation as explained above) had a quota of 78.96 lakh shares of which it has got bids for 15,598.66 lakh shares at the close of Day-3, implying a subscription ratio of 197.55X 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 Indegene 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 55.07X (getting applications for 3,413.08 lakh shares against the quota of 61.97 lakh shares). That is a relatively 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 60.96X while the below ₹10 lakh bid category (S-HNIs) got subscribed 43.30X. This is just in the form of additional 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 modest 7.95X at the close of Day-3, showing relatively modest to strong appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 144.61 lakh shares on offer, valid bids were received for 1,149.80 lakh shares, which included bids for 995.62 lakh shares at the cut-off price. The IPO is priced in the band of (₹430 to ₹452 per share) and has closed for subscription as of the close of Wednesday, 08th May 2024. The final pricing decision in the band is awaited, though upper end looks likely.

Next Steps in the Indegene IPO

The issue opens for subscription on 06th May 2024 and closes for subscription on 08th May 2024 (both days inclusive). The basis of allotment will be finalized on 09th May 2024 and the refunds will be initiated on 10th May 2024. In addition, the demat credits are expected to also happen on 10th May 2024 and the stock will list on 13th May 2024 on the NSE and the BSE. Indegene Ltd will test the appetite for such value added healthcare support stocks in India. The credits to the demat account to the extent of shares allotted will happen by the close of 10th May 2024 under ISIN (INE065X01017).