Elin Electronics IPO subscribed 3.09 times at close

Elin Electronics IPO worth Rs. 475 crore, consisted of a fresh issue of Rs. 175 crore and an offer for sale (OFS) of Rs. 300 crore. While the fresh issue portion resulted in fresh inflows into the company, it was also capital and EPS dilutive. On the other hand, the offer sale does not dilute the EPS as it is just a transfer of ownership. However, the OFS does not infuse any fresh funds into the company. The IPO of Elin Electronics Ltd saw fairly tepid response on Day-1 and Day-2 of the IPO and closed with moderate subscription numbers at the close of Day-3. In fact, the company got fully subscribed on the last day of the IPO only. As per the combined bid details put out by the BSE at the close of Day-3, Elin Electronics Ltd IPO was subscribed 3.09X 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 segment did see some good traction on the last day. The HNI portion did do well but there was no surge of funding applications coming on the last day of the IPO.

As of close of 22nd December 2022, out of the 142.09 lakh shares on offer in the IPO, Elin Electronics Ltd saw bids for 439.67 lakh shares. This implies an overall subscription of 3.09X. 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. 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 and the HNI / NII bids. However, the NII bids did not see the normal demand surge coming from the corporate applications and the funded applications.

Elin Electronics Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 19th December 2022, Elin Electronics Ltd did an anchor placement of 57,69,223 shares at the upper end of the price band of Rs.247 to a total of 15 anchor investors raising Rs.142.50 crore in the process. The list of QIB investors was entirely dominated by the domestic names with the domestic funds and the domestic insurance companies accounting for the bulk of the anchor book. Some of the key domestic investors in the anchor book were SBI MF, Kotak MF, Aditya Birla Sun Life MF, Pinebridge MF, SBI Life Insurance etc. Mutual funds accounted for over 70% of the anchor book. Pinebridge India Equity Fund was the sole FPI in the anchor book.

The QIB portion (net of anchor allocation as explained above) had a quota of 40.60 lakh shares of which it had got bids for 183.03 lakh shares at the close of Day-3, implying a subscription ratio of 4.51X 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 Elin Electronics Ltd IPO subscription overall, the actual demand did turn to be quite moderate for the IPO.

HNI / NII Portion

The HNI portion got subscribed 3.29X (getting applications for 100.22 lakh shares against the quota of 30.45 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 not exactly visible as the overall HNI / NII portion just about added to its tally on the last day. However, the HNI portion did eventually manage to sail through.

Now the NII/HNI portion is reported in two parts viz. bids below Rs10 lakhs (S-HNI) and bids above Rs10 lakhs (B-HNI). The bids above the Rs10 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 2.99X while the below Rs10 lakh bid category (S-HNIs) got subscribed 3.89X. 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 2.20X 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 71.05 lakh shares on offer, valid bids were received for 156.42 lakh shares, which included bids for 129.43 lakh shares at the cut-off price. The IPO is priced in the band of (Rs234 to Rs247) and has closed for subscription as of the close of Monday, 22nd December 2022.