Awfis Space Solutions IPO Anchor Allocation at 44.84%

About Awfis Space Solutions IPO

Awfis Space Solutions IPO will be open from May 22nd, 2024 to May 26th, 2024; both days inclusive. The stock of Awfis Space Solutions Ltd has a face value of ₹10 per share and the price band for the book building IPO has been set in the range of ₹364 to ₹383 per share. The IPO of Awfis Space Solutions Ltd will be a combination of a fresh issue of shares and offer for sale (OFS) component. The fresh issue brings in funds into the company, but is also EPS and equity dilutive. On the other hand, OFS is just a transfer of ownership. The fresh issue portion of the IPO of Awfis Space Solutions Ltd comprises the issue of 33,42,037 shares (33.42 lakh shares approximately), which at the upper price band of ₹383 per share will translate into a fresh issue size of ₹128 crore.

The offer for sale (OFS) portion of the Awfis Space Solutions IPO comprises the sale / offer of 1,22,95,699 shares (122.96 lakh shares approximately), which at the upper price band of ₹383 per share will translate into an OFS size of ₹470.93 crore. Out of the OFS size of 122.96 lakh shares, 1 promoter shareholder Peak XV Partners Investments will offer (66.16 lakh shares). Out of the 2 other selling shareholders, Bisque Limited will offer (55.95 lakh shares), and Link Investment Trust will offer (0.85 lakh shares). Thus, the total IPO of Awfis Space Solutions Ltd will comprise of a fresh issue and an OFS of 1,56,37,736 shares (156.38 lakh shares approximately) which at the upper end of the price band of ₹383 per share aggregates to total issue size of ₹598.93 crore. The IPO of Awfis Space Solutions Ltd will be listed on the NSE and the BSE on the IPO mainboard.

The fresh funds will be used for funding capex of new centres, and for working capital requirements. The company has been promoted by Amit Ramani and Peak XV. The IPO will be lead managed by ICICI Securities, Axis Capital, IIFL Securities, and Emkay Global Financial Services; while Bigshare Services Private Ltd will be the IPO registrar.

Read more about Awfis Space Solutions IPO

A brief on the anchor allocation of Awfis Space Solutions IPO

The anchor issue of Awfis Space Solutions Ltd saw a relatively strong response on 21st May 2024 with 44.84% of the IPO size getting absorbed by the anchors. Out of 1,56,43,153 shares (156.43 lakh shares approximately) on offer, the anchors picked up 70,13,483 shares (70.13 lakh shares approximately) accounting for 44.84% of the total IPO size. The anchor placement reporting was made to the BSE late on Tuesday, 21st May 2024; one working day ahead of the IPO opening on Wednesday, 22nd May 2024.

The entire anchor allocation was made at the upper end of the price band of ₹383 per share. This includes the face value of ₹10 per share plus a share premium of ₹373 per share, taking the anchor allocation price to ₹383 per share. Let us focus on the anchor allotment portion ahead of the Awfis Space Solutions Ltd IPO, which saw the anchor bidding opening and also closing on 21st May 2024. Post the anchor allocation, here is how the overall allocation looked.

Here it must be noted that the 70,13,483 shares allocated to the anchor investors on 21st May 2024, were actually 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 IPO portion reduced to the extent of the anchor allocation. As a result, the QIB quota has reduced from 74.73% before the anchor allocation to 29.89% after the anchor allocation. The overall allocation to QIBs includes the anchor portion, so the anchor shares allotted has been deducted from the QIB quota for the purpose of the public issue.

Finer points of 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 is different from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. It is just to give confidence to investors that the issue is backed by large established institutions. It is the presence of institutional investors like mutual funds and foreign portfolio investors (FPIs) that gives confidence to the retail investors. Here are details of the anchor lock-in for the issue of Awfis Space Solutions Ltd.

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 under, “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 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 or mutual fund or insurance company or a sovereign fund which invests before the IPO is made available to the public as per SEBI regulations. 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 price discovery of the IPO

Anchor allocation investors in Awfis Space Solutions IPO

On 21st May 2024, Awfis Space Solutions Ltd completed the bidding for its anchor allocation. There was a strong and robust response as the anchor investors participated through the process of book building. A total of 70,13,483 shares were allotted to a total of 32 anchor investors. The allocation was done at the upper IPO price band of ₹383 per share (including premium of ₹373 per share) which resulted in an overall anchor allocation of ₹268.62 crore. The anchors have already absorbed 44.84% of the total issue size of ₹599.13 crore, which is indicative of fairly robust institutional demand.

Listed below are the 24 anchor investors who, have been allotted 2% or more of the anchor allocation done ahead of the IPO of Awfis Space Solutions Ltd. The entire anchor allocation of ₹268.62 crore was spread across a total of 32 major anchor investors, with only 24 anchor investors getting more than 2% each out of the anchor allocation quota. While there were 32 anchor investors in all, only the 24 anchor investors who got allocated 2% or more each of the anchor quota are listed in the table below. These 24 anchor investors accounted for 88.09% of the total anchor collection of  ₹268.62 crore. The detailed allocation is captured in the table below. The table below is indexed descending on the size of anchor allocation in terms of number of shares.

Data Source: BSE Filings (Value Allocated in ₹ in Crore)

The above list only includes the set of 24 anchor investors who got allotted shares of 2% or above each of the anchor portion done ahead of the Awfis Space Solutions Ltd IPO. In fact, there were 32 anchor investor in all; with only the anchor investors getting more than 2% each of the anchor quota being mentioned in the list above. The detailed and comprehensive report on the anchor allocation with the mutual fund portion separated can be accessed by clicking on the link below.

https://www.bseindia.com/markets/MarketInfo/DownloadAttach.aspx?id=20240521-59&attachedId=5c38a260-bdd4-4642-97aa-9ddb0ea2d685

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

Overall, the anchors absorbed 44.84% of the total issue size. The QIB portion in the IPO has already been reduced to the extent of the anchor placement done above. Only the balance amount will be available for QIB allocation as part of the regular IPO. The general norm is that, in anchor placements, smaller issues find it hard to get FPIs interested while larger issues do not interest mutual funds. Awfis Space Solutions Ltd saw a good deal of buying interest from all category of anchors viz. FPIs, participatory notes routed through ODIs, domestic mutual funds, AIFs, and insurance companies. Let us finally look at the sub-category of mutual fund participation in the anchor allocation ahead of the Awfis Space Solutions Ltd IPO.

The anchor response normally sets the tone for the retail participation in the IPO and the anchor response has been fairly steady this time around. Out of the 70,13,483 shares allocated to the anchors in the IPO, a total of 37,53,968 shares were allocated to domestic mutual funds registered with SEBI. This allocation was spread across 19 mutual fund schemes belonging to 12 asset management company (AMCs). The mutual fund allocation in the anchor portion amounted to 53.53% of the total anchor size.

Key dates for Awfis Space Solutions IPO and how to apply?

The issue opens for subscription on 22nd May 2024 and closes for subscription on 27th May 2024 (both days inclusive). The basis of allotment will be finalized on 28th May 2024 and the refunds will be initiated on 29th May 2024. In addition, the demat credits are expected to also happen on 29th May 2024 and the stock will list on 30th May 2024 on the NSE and the BSE. Awfis Space Solutions Ltd will test the appetite for private sector new age realty stocks in India. The credits to the demat account to the extent of shares allotted will happen by the close of 29th May 2024 under ISIN (INE108V01019).