ASK Automotive IPO Subscription Surges to 51.14 Times

The IPO of ASK Automotive Ltd opened on 07th November 2023 and closed for subscription on 09th November 2023. The stock of ASK Automotive Ltd has a face value of ₹2 per share and the price band for the book building IPO has been set in the band of ₹268 to ₹282. The final price will be discovered within this band. The IPO of ASK Automotive Ltd will be entirely an offer for sale (OFS) with no fresh issue component in the IPO. The offer for sale (OFS) portion of the IPO of ASK Automotive Ltd comprises the sale of 2,95,71,390 shares (295.71 lakh shares approximately), which at the upper price band of ₹282 per share will translate into an offer for sale (OFS) size of ₹833.91 crore. The OFS selling will be by the two promoter shareholders. Out of the 295.71 lakh shares OFS, promoter Kuldip Singh Rathee will offer 207.00 lakh shares while the other promoter, Vijay Rathee will offer the remaining 88.71 lakh shares in the offer for sale (OFS).

In the absence of any fresh issue component, the OFS portion will also double up as the total size of the IPO of ASK Automotive Ltd. Therefore, the overall IPO of ASK Automotive Ltd will also comprise the sale of 2,95,71,390 shares (295.71 crore shares approximately), which at the upper price band of ₹282 per share will translate into total IPO issue size of ₹833.91 crore overall. Being an offer for sale and only the 2 promoter shareholders offering shares under the OFS portion, there are no fresh funds coming into the company, so the question of utilization of funds does not arise. The shares will be listed on the NSE and the BSE. The IPO will be lead managed by JM Financial, Axis Capital, ICICI Securities, and IIFL Securities. Link Intime India Private Ltd will be the registrar to the issue.

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 quite slow for the retail investors. In fact, the QIB portion got fully subscribed only on the last and final day of the IPO while the HNI / NII portion and the retail portion got fully subscribed on the second day of the IPO itself. Even the overall IPO saw subscription book filling up 1.35 times, at the close of the second day of the IPO. The IPO was kept open for a total period of 3 days. The table below captures the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 51.14 times subscribed at the close of the third and final day of the IPO on 09th November 2023. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got just 0.03 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 0.06X to 142.41X.
   
• The HNI / NII portion got 0.41 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 2.28X to 35.47X.
   
• Retail portion got just 0.57 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 1.70X to 5.70X.
   
• The overall IPO got 0.39 times subscribed at the end of the first day of the IPO. However, on last day of the IPO, overall subscription moved from 1.35X to 51.14X.

Rapid update on the overall IPO response

The IPO saw fairly tepid to regular flows on Day-1 and Day-2, with most of the action visible only on Day-3 of the IPO. However, the IPO did close with relatively healthy subscription numbers at the close of Day-3. In fact, the IPO of ASK Automotive Ltd got fully subscribed on the second day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, ASK Automotive Ltd IPO was subscribed 51.14X 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 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 strong, although it was fully subscribed on Day-2 of the IPO itself, but subsequent traction was limited. Firstly, let us look at the details of overall allocation.

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 09th November 2023, out of the 207.00 lakh shares on offer in the IPO, ASK Automotive Ltd saw bids for 10,585.87 lakh shares. This implies an overall subscription of 51.14X overall. The granular break-up of subscriptions was in favour of the QIB investors 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.

Data Source: BSE

Subscription status of QIB Portion

On 06th November 2023, ASK Automotive 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 88,71,416 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹282 per share (including premium of ₹280 per share) which resulted in an overall allocation of ₹250.17 crore. The anchors absorbed 30% of the total issue size of ₹833.91 crore.

The QIB portion (net of anchor allocation as explained above) had a quota of 59.14 lakh shares of which it has got bids for 8,422.29 lakh shares at the close of Day-3, implying a subscription ratio of 142.41X 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 ASK Automotive 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 35.47X (getting applications for 1,573.48 lakh shares against the quota of 44.36 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 41.13X while the below ₹10 lakh bid category (S-HNIs) got subscribed 24.16X. This is just for 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 just 5.70X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 103.50 lakh shares on offer, valid bids were received for 590.11 lakh shares, which included bids for 492.75 lakh shares at the cut-off price. The IPO is priced in the band of (₹268 to ₹282 per share) and has closed for subscription as of the close of Thursday, 09th November 2023.