Krystal Integrated Services IPO: Anchor Allocation at 30%

About Krystal Integrated Services IPO

Krystal Integrated Services is poised to launch its Initial Public Offering (IPO) aiming to raise Rs 300.13 crores. IPO structure consists of fresh issue of 0.24 crore shares valued at Rs 175.00 crores & offer for sale of 0.18 crore shares totaling Rs 125.13 crores. IPO subscription period spans from March 14 to March 18, 2024.

During this window, investors will have opportunity to bid for Krystal Integrated Services IPO within price band of ₹680 to ₹715 per share. Minimum lot size for application is set at 20 shares, requiring investment of ₹14,300. Retail investors can apply for 1 to 13 lots, while Small High Net Worth Individuals (S-HNI) have option to invest in 14 to 69 lots, & Big High Net Worth Individuals (B-HNI) can opt for 70 lots or more.

The process will be overseen by Inga Ventures Pvt Ltd, appointed book running lead manager, along with Link Intime India Private Ltd serving as registrar for issue. Allotment of shares is expected to be finalized on March 19, 2024.

Post-allotment, refunds for unsuccessful applicants will be initiated on March 20, 2024, with shares credited to demat accounts of successful applicants on same day. Tentative listing date on both Bombay Stock Exchange (BSE) & National Stock Exchange (NSE) is set for March 21, 2024.

Once listed, Krystal Integrated Services shares will be tradable on BSE & NSE platforms, offering investors opportunity to participate in company's growth journey. Investors are encouraged to refer to IPO RHP (Red Herring Prospectus) for detailed information regarding offering.

The Krystal Integrated Services IPO's book running lead manager is Inga Ventures Pvt Ltd, & issue's registrar is Link Intime India Private Ltd.

A Brief on Anchor Allocation of Krystal Integrated Services IPO

Source:BSE

Total 4,197,551 shares are available in Krystal Integrated Services IPO. QIB received 839,510 (20.00%), NII received 629,633 (15.00%), RII received 1,469,143 (35.00%), & Anchor investors received 1,259,265 (30.00%). Minimum number of shares for 73,457 RIIs is 20, while minimum number of shares for 749 (sNII) & 1,499 (bNII) is 280. (If there is large subscription)

Finer Points of Krystal Integrated Services IPO Anchor Allocation Process

Before we go into details of actual anchor allotment, quick word on process of anchor placement. Anchor placement ahead of IPO/FPO is different from pre-IPO placement in that anchor allocation has lock-in period of just one month, although under new rules, part of anchor portion will be locked in for 3 months. It is just to give confidence to investors that issue is backed by large established institutions. It is presence of institutional investors like mutual funds & foreign portfolio investors (FPIs) that gives confidence to retail investors. Here are details of anchor lock-in for issue of Krystal Integrated Services Ltd.

However, anchor investors cannot be allotted shares at discount to IPO price. This is explicitly stated in SEBI revised regulations as under, “As per Securities & Exchange Board of India (Issue of Capital & Disclosure Requirement) Regulations, 2018, as amended, in case Offer Price discovered through book building process is higher than Anchor Investor Allocation Price, then Anchor investors will be required to pay difference by pay-in as specified in revised CAN.

An anchor investor in IPO is normally qualified institutional buyer (QIB) like foreign portfolio investor or mutual fund or insurance company or sovereign fund which invests before IPO is made available to public as per SEBI regulations. Anchor portion is part of public issue, so IPO portion to public (QIB portion) is reduced to that extent. As initial investors, these anchors make IPO process more attractive for investors, & instil confidence in them. Anchor investors also largely aid in price discovery of IPO.

Anchor Investors in Krystal Integrated Services IPO

Source:BSE

The detailed & comprehensive report on anchor allocation with mutual fund portion separated (if any) can be accessed by clicking on link below.

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20240313-22

The detailed report is available in PDF format & can be downloaded by clicking on link above. Alternatively, readers can also opt to cut this link & paste in their browser, in case link is not directly clickable. Details of anchor allocation can also be accessed in Notices section of BSE on its website www.bseindia.com.

Diverse Investor Base: Participation of variety of institutional investors, ranging from ITI Flexi Cap Fund to BofA Securities Europe SA-Odi, indicates widespread interest across different segments of market.

Confidence Indicator: Substantial investment by anchor investors, totaling 12,59,265 shares valued at Rs 90,03,74,475, showcases high level of confidence in Krystal Integrated Services' potential.

Strategic Allocations: Allocation percentages to anchor investors were carefully distributed, with some, like BofA Securities Europe SA-Odi & Nav Capital VCC, receiving larger portions, indicating strong interest & confidence from these entities.

Retail Investor Implication: Presence of reputable funds alongside larger institutional investors could inspire confidence among retail investors, potentially driving broader market participation.

Balanced Approach: Allocation strategy appears balanced, considering both value & percentage of anchor portion, ensuring fair distribution among different investor groups.

In summary, anchor subscription & allocation data reflect positive market sentiment towards Krystal Integrated Services IPO, with diverse institutional participation & substantial investment, indicating promising outlook for company's public debut.