Grill Splendour Services (Birdy’s) IPO Subscribed 8.68 times

About Grill Splendour Services (Birdy’s) IPO

The stock of Grill Splendour Services IPO (Birdy’s) has a face value of ₹10 per share and it is a fixed price issue. The price for the book building issue is set at ₹120 per share. Being a fixed price issue, there is no question of price discovery involved in the process. Grill Splendour Services IPO (Birdy’s) has only a fresh issue component and no offer for sale (OFS) portion. It must be remembered that the fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership and  hence it is not EPS or equity dilutive. As part of the fresh issue portion of the IPO, Grill Splendour Services Ltd (Birdy’s) will issue a total of 13,72,800 shares (13.73 lakh shares approximately), which at the fixed IPO price of ₹120 per share aggregates to fresh fund raising of ₹16.47 crore. Since there is no offer for sale (OFS) portion, the fresh issue size will also double up as the overall IPO size. Therefore, the overall IPO size will also comprise of the issue of 13,72,800 shares (13.73 lakh shares approximately) which at the fixed IPO price of ₹120 per share will aggregate to overall IPO size of ₹16.47 crore.

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 69,600 shares. Rikhav Securities Ltd will be the market maker to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs, post listing. The promoter holding in the company currently stands at 49.75% and, post-IPO, it will get diluted to 36.64%. The fresh issue funds will be used by the company for repaying / prepaying the loans on its books and also for funding the working capital gaps. Inventure Merchant Banker Services Private Ltd will be the lead manager to the issue, and Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Rikhav Securities Ltd.

Read more about Grill Splendour Services IPO

Final subscription status of Grill Splendour Services IPO (Birdy’s)

Here is subscription status of Grill Splendour Services IPO (Birdy’s) at close on 18th April 2024.

As can be seen from the above table, the overall Grill Splendour Services IPO (Birdy’s) got subscribed a rather tepid 8.68 times. The Retail portion led the stakes with 12.78 times subscription, followed by the HNI / NII portion at 4.59 times subscription. There was no dedicated QIB allocation in this IPO. That is a very tepid to modest response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past. The subscription has very limited traction for the IPO across both the categories of investors; retail and HNI / NII investors.

Allocation quota for various categories

The issue was open for retail investors and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, and the HNI / NII segments. A total of 69,600 shares were allocated as market maker portion to Rikhav  Securities Ltd, which will act as market maker inventory to provide bid-ask liquidity on the counter post listing. Market maker action not only improves liquidity in the counter but also reduces the basis risk. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

In the above IPO of Grill Splendour Services IPO (Birdy’s), there is no dedicated QIB allocation in the IPO. The anchor allocation to the anchor investors is normally carved out of this QIB allocation and hence the company has not done any anchor allocation in the IPO. Normally, the anchor is done to institutional investors, which gives confidence and assurance to the retail shareholders about the institutional interest in the stock The anchor allocation is normally adjusted and deducted from the QIB quota and only the net number of shares is available for public issue under the QIB portion.

However, in this case, there is neither any QIB quota, nor any anchor allocation to investors ahead of the IPO. Normally, the anchor portion bidding is done on the day before the IPO opens and such anchor investments are subjected to lock in at two levels. Half the anchor allocation is locked in for 30 days while the balance anchor allocation shares are locked in for a period of 90 days. The allocation of market maker inventory of 5.07% is outside the anchor portion. The market making portion is more towards ensuring liquidity post listing and ensuring low basis spreads on the stock.

How subscription built up for the Grill Splendour Services (Birdy’s) IPO?

The oversubscription of the IPO was dominated by the HNI / NII investors followed by the Retail Investor category in that order. The table below captures the day-wise progression of the subscription status of Grill Splendour Services Ltd (Birdy’s). The IPO was kept open for 3 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Grill Splendour Services IPO (Birdy’s).

• The Retail portion got the best subscription in the Grill Splendour Services Ltd (Birdy’s) IPO at 12.78 times and it got 3.94 times subscribed on the first day of the IPO itself.
   
• The HNI / NII portion was behind the retail portion in terms of subscription at 4.59 times overall and it got just 0.38 times subscribed at the end of the first day.
   
• While the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion also got fully subscribed only on the second day of the IPO itself. However, due to the strong retail traction, the overall IPO got fully subscribed on the first day  of the IPO itself. The overall IPO, which saw subscription of 8.68 times at close, got fully subscribed at 2.16 times at the close of the first day.
   
• The HNI / NII portion saw the best traction on the last day of the IPO. The HNI / NII portion saw the total subscription ratio moving from 1.30X to 4.59X on the third and final day of the IPO.
   
• Like the HNI / NII portion, even the Retail portion saw the good traction on the last day of the IPO. In fact, the retail subscription ratio moved from 6.69X to 12.78X on the last day of the IPO.
   
• What about the Overall IPO. The last day story was true for the overall IPO also. On the third and final day of the IPO, the subscription ratio overall moved from 4.00X to 18.68X on the last day of the IPO.

Next steps in the IPO process

The issue opened for subscription on 15th April 2024 and closed for subscription on 18th April 2024 (both days inclusive). The basis of allotment will be finalized on 19th April 2024 and the refunds will be initiated on 22nd April 2024. In addition, the demat credits are also expected to happen on 22nd April 2024 and the stock is scheduled to list on 23rd April 2024 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The demat credits to the demat account to the extent of allotment will happen by the close of 22nd April 2024 under ISIN Number (INE0PC901019).