Harsha Engineers International IPO subscribed 74.65 times at close

The Rs.755 crore IPO of Harsha Engineers International Ltd, consisted of a fresh issue of Rs455 crore and an offer for sale (OFS) of Rs300 crore. The IPO saw encouraging response on Day-1 and Day-2 of the IPO and on Day-3, the IPO built on the demand across segments. As per the combined bid details put out by the BSE at the close of Day-3, Harsha Engineers International Ltd IPO was subscribed 74.65X overall, with strong demand coming from the QIB segment as well as very robust demand from the HNI segment and the retail segments. The issue has closed for subscription on 16th September 2022. 

As of close of 16th September 2022, out of the 168.64 lakh shares on offer in the IPO, Harsha Engineers International Ltd saw bids for 12,588.38 lakh shares. This implies an overall subscription of 74.65X. The granular break-up of subscriptions was dominated by the QIBs while the HNIs and the retail investors were also quite robust in their response. QIB bids and NII bids typically gather most of the momentum on the last day, and that is what we saw in this issue too.

Harsha Engineers International Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 13th September 2022, Harsha Engineers International Ltd did an anchor placement of 68,40,855 shares at the upper end of the price band of Rs.330 to 23 anchor investors raising Rs.225.75 crore. The list of QIB investors included a number of marquee global names like American Funds Insurance, Goldman Sachs India Fund and Abu Dhabi Investment Authority (Monsoon). Domestic anchor investors included Whiteoak Capital, HDFC Mutual Fund, SBI Mutual Fund, Pinebridge India Fund, Nippon MF, ICICI Pru MF, DSP MF, L&T MF and SBI Life Insurance.

The QIB portion (net of anchor allocation as explained above) has a quota of 47.93 lakh shares of which it has got bids for 8,543.74 lakh shares at the close of Day-3, implying a subscription ratio of 178.26X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day but the heavy demand for the anchor placement had given an indication of the institutional appetite for the Harsha Engineers International Ltd IPO subscription overall.

HNI / NII Portion

The HNI portion got subscribed 71.31X (getting applications for 2,563.39 lakh shares against the quota of 35.95 lakh shares). This is a relatively strong response on Day-3 but of course 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. 

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 oversubscribed 74.78X while the below Rs10 lakh bid category (S-HNIs) got oversubscribed 64.37X. 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 an impressive 17.53X at the close of Day-3, showing strong retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 83.88 lakh shares on offer, valid bids were received for 1,470.67 lakh shares, which included bids for 1,246.50 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.314-Rs.330) and has closed for subscription as of the close of Friday, 16th September 2022.