Dharmaj Crop Guard IPO: Final subscription details

Dharmaj Crop Guard IPO, worth Rs. 251.15 crore comprised of a fresh issue of Rs. 216 crore and an offer for sale of Rs. 35.15 crore. In this context, it must be noted that the fresh issue portion infuses funds and also leads to dilution of equity and the EPS. On the other hand, the OFS portion purely results in transfer of ownership so there is no EPS or equity dilution in the case of an offer for sale.

The IPO saw fairly steady growth in subscriptions on Day-1 and Day-2 of the IPO and closed with rather healthy subscription numbers at the close of Day-3. In fact, the company 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, Dharmaj Crop Guard Ltd IPO was subscribed at 35.49X 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 NII / HNI segment saw good traction on the last day. The HNI portion did do well as there was a surge of funding applications coming on the last day of the IPO, coupled with corporate applications.

As of close of 30th November 2022, out of the 80.13 lakh shares on offer in the IPO, Dharmaj Crop Guard Ltd saw bids for 2,843.52 lakh shares. This implies an overall subscription of 35.49X. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion got the lowest subscription among the various categories, although it was quite robust overall. 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. Perhaps, the small size of the issue may have also contributed substantially to the strong subscription response to the IPO.

Dharmaj Crop Guard Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 25th November 2022, Dharmaj Crop Guard Ltd did an anchor placement of 31,62,540 shares at the upper end of the price band of Rs. 237 to 3 anchor investors raising Rs. 74.95 crore. The list of anchor investors had only 3 names in it viz. Elara India Opportunities Fund, Rajasthan Global Securities Ltd and Resonance Opportunities Fund. The entire anchor allocation was distributed among these 3 anchor investors only.

The QIB portion (net of anchor allocation as explained above) has a quota of 22.44 lakh shares of which it has got bids for 1,081.90 lakh shares at the close of Day-3, implying a subscription ratio of 48.21X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the robust demand for the anchor placement had given an indication of the institutional appetite for the Dharmaj Crop Guard Ltd IPO subscription overall, the actual demand did turn to be more than robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 52.29X (getting applications for 896.31 lakh shares against the quota of 17.14 lakh shares). That is a rather steady 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 exactly what was visible as the overall HNI / NII portion which just about added to its heft on the last day. However, the HNI portion did end with robust numbers.

Now the NII/HNI portion is reported in two parts viz. bids below Rs. 10 lakhs (S-HNI) and bids above Rs. 10 lakhs (B-HNI). The bids above the Rs. 10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs10 lakh bid category got subscribed 52.97X while the below Rs. 10 lakh bid category (S-HNIs) got subscribed 50.92X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was subscribed 21.53X at the close of Day-3, showing steady retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 40 lakh shares on offer, valid bids were received for 861.19 lakh shares, which included bids for 738.76 lakh shares at the cut-off price. The IPO is priced in the band of (Rs. 216-Rs. 237) and has closed for subscription as of the close of Wednesday, 30th November 2022.