BLS E-Services IPO Closing Subscribed 162.47 times

The stock of BLS E-Services 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 ₹129 to ₹135 per share. The final price will be discovered within this band. The IPO of BLS E-Services Ltd will be purely a fresh issue of shares with no offer for sale (OFS) component. The fresh issue portion of the IPO of BLS E-Services Ltd comprises the issue of 2,30,30,000 shares (230.30 lakh shares), which at the upper price band of ₹135 per share will translate into a fresh issue size of ₹310.91 crore. Since there is no OFS component, the fresh issue will also double up as the overall issue size. The overall IPO of BLS E-Services, therefore, will comprise of the issue of 2,30,30,000 shares (230.30 lakh shares), which at the upper price band of ₹135 per share will translate into overall issue size of ₹310.91 crore.

The company will be using the fresh fund proceeds for strengthening the Technology infrastructure, develop new capabilities and consolidate their existing platforms. BLS E-Services Ltd will also be using the funds for bankrolling its organic and inorganic growth and expansion plans; apart from using some portion for general corporate expenses. The IPO of BLS E-Services Ltd will be listed on the NSE and the BSE on the IPO mainboard. Post-IPO, the promoter stake gets diluted from 93.80% to 69.73%. The IPO will be lead managed by Unistone Capital Private Ltd, while KFIN Technologies Ltd will be the registrar to the 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 quite rapid for the retail investors. In fact, the QIB portion got just about fully subscribed on the first day of the IPO while the retail portion and the HNI portion got comfortably fully subscribed on the first day of the IPO itself. The overall IPO also saw the subscription book filling up on the first day of the IPO itself. 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 was also high and only next to the HNI / NII portion. This was almost at par with the QIB portion of the IPO. Here is the day-wise progress in IPO subscription of the total available quota. The available quota in this case is net of the anchor allocation of shares, done one working day prior to the opening of the IPO.

As can be seen from the above table, the overall IPO got 162.47 times subscribed at the close of the third and final day of the IPO on 01st February 2024. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got 2.19 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 2.68X to 123.30X.
   
• The HNI / NII portion got 29.92 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 94.36X to 300.14X.
   
• Retail portion got 50.72 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 127.05X to 237.00X.
   
• The overall IPO got 15.93 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 43.09X to 162.47X.

Rapid update on the overall IPO response

The IPO saw fairly slow 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 BLS E-Services Ltd got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, BLS E-Services Ltd IPO was subscribed 162.47X overall, with best demand coming from the HNI / NII segment, followed by the Retail segment and the QIB 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, although it was fully subscribed on Day-1 of the IPO itself, but subsequent traction was a tad more cautious. 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.

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 01st February 2024, out of the 137.03 lakh shares on offer in the IPO, BLS E-Services Ltd saw bids for 22,263.68 lakh shares. This implies an overall subscription of 162.47X at a macro level. The granular break-up of subscriptions was in favour of the HNI / NII investors followed by the Retail investors and the QIB 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 29th January 2024, BLS E-Services 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 93,27,096 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹135 per share (including premium of ₹125 per share) which resulted in an overall allocation of ₹125.92 crore. The anchors absorbed 40.50% of the total issue size of ₹310.91 crore.  It may be noted that half the anchor portion is locked for 1 month from the date of allotment i.e. up to March 18th, 2024. The other 50% is locked for 3 months from the date of allotment i.e., up to June 18th 2024.

The QIB portion (net of anchor allocation as explained above) had a quota of 62.18 lakh shares of which it has got bids for 7,667.14 lakh shares at the close of Day-3, implying a subscription ratio of 123.30X 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 BLS E-Services 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 300.14X (getting applications for 9,331.47 lakh shares against the quota of 31.09 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 305.27X while the below ₹10 lakh bid category (S-HNIs) got subscribed 289.87X. 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 just 237.00X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is 10% in this IPO. For retail investors; out of the 20.73 lakh shares on offer, valid bids were received for 4,912.24 lakh shares, which included bids for 4,216.73 lakh shares at the cut-off price. The IPO is priced in the band of (₹129 to ₹135 per share) and has closed for subscription as of the close of Thursday, 01st February 2024.