Entero Healthcare Solutions IPO Subscribed 1.53 times

Entero Healthcare Solutions Ltd - Subscriptions progress update

While the QIB portion and the retail portion picked up some minimal traction on the last day of the Entero Healthcare Solutions IPO, the overall journey was quite tepid for the HNI / NII investors. The overall HNI / NII portion remained grossly undersubscribed, largely due to lack of interest in the IPO. In fact, the QIB portion got just about fully subscribed on the last day of the Entero Healthcare Solutions IPO while the retail portion also got fully subscribed on the last day only. However, the HNI / NII portion left a lot to be desired in terms of IPO subscription in the IPO. The HNI / NII portion got subscribed just about 22% of the allocation quota. The overall IPO also got through only on the last day with very limited subscription.

The overall IPO also saw the subscription book filling up fully only on the last day of the IPO. The IPO was kept open for a total period of 3 consecutive trading days. Overall, the IPO struggled to get the book filled up closing with just about 1.53 times subscription for the IPO as a whole. Here is the day-wise progress in IPO subscription of the total available quota. The available QIB quota in the table below; is net of the anchor allocation of shares, done one working day prior to the opening of the IPO. In fact, the IPO had got 44.77% subscribed in the anchor allotment portion itself.

As can be seen from the above table, the overall IPO got 1.53 times subscribed at the close of the third and final day of the IPO on 13th 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 0.00 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 0.00X to 2.28X.
   
• The HNI / NII portion got just 0.04 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 0.09X to 0.22X only.
   
• Retail portion got 0.32 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 0.62X to 1.33X.
   
• The overall IPO got 0.09 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 0.18X to 1.53X.

Rapid update on the overall IPO response

The IPO saw fairly steady response on Day-1 and Day-2, with whatever limited action visible only on Day-3 of the IPO. In fact, the IPO just did not live up to the promise in the anchor allotment day. However, the IPO did close with tepid subscription numbers at the close of Day-3 although it just about got fully subscribed with the HNI portion lagging. In fact, the IPO of Entero Healthcare Solutions Ltd got fully subscribed only on the last day of the IPO after struggling through the three days of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Entero Healthcare Solutions Ltd IPO was subscribed 1.53X overall, with best demand coming from the QIB segment, followed by the retail segment and the HNI / NII segment falling short at just about 22% subscription.

In fact, the institutional QIB segment and the HNI / NII segments generally see some very good traction on the last day. This was totally missing as the QIB portion just about got through the line and the HNI / NII portion struggled to even get 22% subscribed.  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 13th February 2024, out of the 71.50 lakh shares on offer in the IPO, Entero Healthcare Solutions Ltd saw bids for 109.50 lakh shares. This implies an overall subscription of 1.53X at a macro level. The granular break-up of subscriptions was in favour of the QIB investors followed by the Retail investors in that order. The HNI / NII portion got undersubscribed in the IPO as it got bids for only 22% of the total available quota. QIB bids and NII bids typically gather most of the momentum on the last day, but that was not the case in this issue. The QIB bids at least showed some pick-up in the last day, but the HNI / NII portion lagged all through. Here are the details of the category-wise subscription.

Data Source: BSE

Subscription status of QIB Portion

On 08th February 2024, Entero Healthcare Solutions 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 56,94,753 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹1,258 per share (including premium of ₹1,248 per share) which resulted in an overall allocation of ₹716.40 crore. The anchors absorbed 44.33% of the total issue size of ₹1,600 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 15th, 2024. The other 50% is locked for 3 months from the date of allotment i.e., up to May 14th 2024.

The QIB portion (net of anchor allocation as explained above) had a quota of 38.08 lakh shares of which it has got bids for 86.86 lakh shares at the close of Day-3, implying a subscription ratio of 2.28X 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 Entero Healthcare Solutions Ltd IPO subscription overall, the actual demand did turn to be relatively tepid in the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed just 22% or 0.22X (getting applications for 4.27 lakh shares against the quota of 19.61 lakh shares). That is a very disappointing 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 just not visible as the overall HNI / NII portion fell far short of the original quota allocation, getting bids of just 22% of the allocation size.

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 0.16X while the below ₹10 lakh bid category (S-HNIs) got subscribed 0.33X. 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 1.33X at the close of Day-3, showing relatively tepid appetite. It must be noted that retail allocation is only 10% in this IPO. For retail investors; out of the 13.07 lakh shares on offer, valid bids were received for 17.44 lakh shares, which included bids for 15.80 lakh shares at the cut-off price. The IPO is priced in the band of (₹1,195 to ₹1,258 per share) and has closed for subscription as of the close of Tuesday, 13th February 2024.