IKIO Lighting IPO subscribed 66.29 times at close

IKIO Lighting IPO worth ₹607 crore, consisted of a fresh issue of ₹350 crore and an offer for sale of ₹257 crore. As you are aware, the fresh issue of shares tends to be equity dilutive while the OFS is not equity dilutive as it is just a transfer of ownership. IKIO Lighting IPO saw fairly tepid response on Day-1, steady response on Day-2 of the IPO and closed with bumper subscriptions coming in across categories on Day-3. In fact, the company got fully subscribed on the first day of the IPO itself, thanks to robust participation from retail and HNI / NIIs.

As per the combined bid details put out by the BSE at the close of Day-3, IKIO Lighting Ltd IPO was subscribed at 66.29X 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 saw some very good traction on the last day. The HNI portion did do well as there was a visible surge of funding applications coming on the last day of the IPO. Retail portion actually did get oversubscribed on the first day itself and it built heft along the way. Here are the details of the overall allocation.

As of close of 08th June 2023, out of the 152.24 lakh shares on offer in the IPO (net of the anchor issue portion, IKIO Lighting Ltd saw bids for 10,092.77 lakh shares. This implies an overall subscription of 66.29X. 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 as well as in the case of the HNI / NII bids. The issue had been fully subscribed in the first two days with the HNI portion and the retail portion getting fully subscribed on the first day itself.

IKIO Lighting Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 24th April 2023, IKIO Lighting Ltd did an anchor placement 30% of the IPO size getting absorbed by the anchors. Out of the 212.81 lakh shares on offer, the anchors picked up 63.84 lakh shares accounting for 30% of the total IPO size. The anchor placement reporting was made to the BSE late on 05th June 2023. The IPO of IKIO Lighting Ltd opened on 06th June 2023 in the price band of ₹270 to ₹285 and closed for subscription on 08th June 2023 (both days inclusive). The entire anchor allocation was made at the upper price band of ₹285. Let us focus on the anchor allotment portion ahead of the IKIO Lighting Ltd IPO. Here are the details of the anchor allocation.

The QIB portion (net of anchor allocation as explained above) has a quota of 42.43 lakh shares of which it has got bids for 6,940.10 lakh shares at the close of Day-3, implying a subscription ratio of 163.58X 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 IKIO Lighting Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 63.35X (getting applications for 2,087.13 lakh shares against the quota of 32.94 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 visible as the overall HNI / NII portion added to its heft on the last day. However, the HNI portion did eventually manage to see very good traction in the S-HNI and the B-HNI portions.

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 66.87X while the below ₹10 lakh bid category (S-HNIs) got subscribed 56.32X. 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 13.86X at the close of Day-3, showing very good retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 76.87 lakh shares on offer, valid bids were received for 1,065.53 lakh shares, which included bids for 898.36 lakh shares at the cut-off price. The IPO was priced in the band of (₹270-₹285) and has closed for subscription as of the close of Thursday, 08th June 2023.