Addictive Learning Technology | LawSikho IPO Subscribed 273.12 times

About the Addictive Learning Technology (LawSikho) IPO

The stock of Addictive Learning Technology Ltd (LawSikho) has a face value of ₹10 per share and the IPO is a book built issue; priced in the band of ₹130 to ₹140 per share. The final price of the IPO will be decided within this price band. Addictive Learning Technology IPO (LawSikho) has a fresh issue component and an offer for sale (OFS) component. As part of the fresh issue portion of the IPO, Addictive Learning Technology Ltd (LawSikho) will issue 41,37,000 shares (41.37 lakh shares), which at the upper end of the book building band of ₹140 per share aggregates to fresh fund raising of ₹57.92 crore. The offer for sale (OFS) portion of the IPO will entire the sale of 1,60,000 shares (1.60 lakh shares), which at the upper end of the book building band of ₹140 per share aggregates to OFS size of ₹2.24 crore.

The entire OFS of 1.60 lakh shares is being offered by the promoter group. As a result, the overall IPO size will comprise of the issue and sale of 42,97,000 shares (42.97 lakh shares) which at the upper IPO band price of ₹140 per share is worth ₹60.16 crore. The IPO of Addictive Learning Technology Ltd (LawSikho) also has a market maker inventory allocation of 3,16,000 shares. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs, post listing. Post the IPO, the promoter stake will dilute from 92.27% to 67.27%. Fresh funds will be used by the company for funding inorganic growth, investments in technology, development of new course, branding, marketing, and working capital needs. Narnolia Financial Services Ltd will be the lead manager to the issue, and Maashitla Securities Private Ltd will be the registrar to the issue.

Final subscription status of Addictive Learning Technology Ltd (LawSikho)

Here is the subscription status of the Addictive Learning Technology IPO (LawSikho) as at close on 24th January 2024.

As can be seen from the above table, the overall IPO of Addictive Learning Technology Ltd (LawSikho) got subscribed an impressive 273.12 times. The HNI / NII portion led the stakes with 414.44 times subscription, followed by the Retail portion at 301.71 times subscription. The QIB portion of the IPO also got a healthy subscription of 116.27 times. That is a very strong and smart response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past. The subscription has shown strong traction for the IPO across all the three categories of investors; QIB, retail and HNI / NII investors.

Allocation quota for various categories

The issue was open for QIBs, retail investors and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, QIB and the HNI / NII segments. A total of 3,16,000 shares were allocated as market maker portion jointly to SS Corporate Securities Ltd and Prabhat Financial Services Ltd, which will act as the combined market maker inventory to provide bid-ask liquidity on the counter post listing. Market maker action not only improves liquidity in the counter but also reduces the basis risk. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

In the above IPO of Addictive Learning Technology Ltd (LawSikho), the anchor allocation of 11,92,000 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 46.23% of the issue size to 18.48% of the issue size. The anchor allocation bidding opened on January 18th, 2024 and also closed on the same day. A total of 11,92,000 shares were allocated across 10 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹140 per share (which includes face value of ₹10 per share and premium of ₹130 per share).

The total anchor allocation value was worth ₹16.69 crore. Out of the 10 anchor allotees, the top 5 anchor allottees with double digit share in the anchor allocation quota included Chhattisgarh Investments Ltd (15.02%), LC Radiance Fund VCC (13.51%), Meru Investment Fund PCC – Cell 1 (12.00%), Resonance Opportunities Fund (12.00%)and NAV Capital Emerging Star Fund (10.49%). These 5 anchor investors accounted for 63.02% of the overall anchor allocation, with the other 5 anchor allottees accounting for the balance. Out of the anchor shares allocated to investors on January 18th, 2024, a lock in of 30 days will be applicable for 50% of the shares (up to March 07th, 2024) and a lock-in of 90 days will be applicable for the remaining shares (up to June 07th, 2024). The allocation of market maker inventory of 7.36% is outside the anchor portion.

How subscription built up for the IPO of Addictive Learning Technology Ltd (LawSikho)

The oversubscription of the IPO was dominated by the HNI / NII followed by the Retail category and the QIB category in that order. The table below captures the day-wise progression of the subscription status of Addictive Learning Technology Ltd (LawSikho). The IPO was kept open for 4 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Addictive Learning Technology Ltd (LawSikho).

• The HNI / NII portion got the best subscription in the Addictive Learning Technology Ltd (LawSikho) IPO at 414.44 times and it got 20.74 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 301.71 times overall and it got 32.64 times subscribed at the end of the first day.
   
• The QIB portion was third in the pecking order in terms of subscription at 116.27 times overall and it got 6.65 times subscribed at the end of the first day.
   
• While the QIB, retail and HNI / NII portion getting fully subscribed on the first day of the IPO itself, even the overall subscription was filled up on the first day itself. The overall IPO which saw subscription of 273.12 times also got fully subscribed at 22.68 times at the close of the first day of the IPO itself.
   
• The retail, and HNI / NII portion saw the best traction on the last day of the IPO. The HNI / NII portion saw the total subscription ratio moving from 95.20X to 414.44X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 168.66X to 301.71X on the last day of the IPO.
   
• The last day traction story was true for QIBs and the overall IPO also. The QIB portion saw the total subscription ratio moving from 11.05X to 116.27X on the last day of the IPO. Finally, regarding the overall IPO subscription ratio, it also moved from 107.99X to 273.12X on the last day of the IPO.

Overall, the IPO of Addictive Learning Technology Ltd (LawSikho) became one of the few SME IPOs in the last one year to have got subscribed more than 270 times and that is a good sign of things to come.

Next steps after the closure of the IPO

With the IPO closed for subscription at the end of January 24th, 2024, the next piece of action shifts to the finalization of the basis of allotment and later to the listing of the IPO. The basis of allotment will be finalized on 25th January 2024 and the refunds will be initiated on 29th January 2024. In addition, the demat credits are expected to happen on 29th January 2024 and the stock is scheduled to list on 30th January 2024 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The demat credits to the demat account to the extent of allotment will happen by the close of 29th January 2024 under ISIN Number (INE0RDH01021).