Inox Green Energy Services Ltd IPO subscribed 1.55 times at close

Inox Green Energy IPO worth Rs.740 crore, comprised of a fresh issue of shares to the tune of Rs370 crore and an offer for sale worth Rs370 crore. The IPO saw fairly tepid response on Day-1 and Day-2 of the IPO and it was only on the third day that the book got fully filled, thanks to some early support from retail investors. It has closed with rather tepid subscription numbers at the close of Day-3. As per the combined bid details put out by the BSE at the close of Day-3, Inox Green Energy Services Ltd IPO was subscribed 1.55 times overall, with best demand coming from the retail segment. The HNI segment actually got undersubscribed while the QIB segment got just about fully subscribed. Even the institutional segment saw some good traction only on the last day. The HNI portion did not pick up traction at all and there was no surge of funding applications on the last day of the IPO.

As of close of 15th November 2022, out of the 661.21 lakh shares on offer in the IPO, Inox Green Energy Services Ltd saw bids for 1,037.40 lakh shares. This implies an overall subscription of 1.55 times. The granular break-up of subscriptions was tilted in favour of the retail investors followed while the QIB portion just about got through and the HNI portion got grossly undersubscribed. QIB bids and NII bids typically gather most of the momentum on the last day, and that was not really visible in either of the cases. While the QIB portion still managed to get through, the HNI bids actually fell short by a rather huge margin.

Inox Green Energy Services Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 10th November 2022, Inox Green Energy Services Ltd did an anchor placement of 5,12,30,769 shares at the upper end of the price band of Rs.65 a total of 27 anchor investors raising Rs333 crore. The list of QIB investors included a number of marquee global names like Volrado Partners, Morgan Stanley Asia, Nomura Singapore, Saint Capital, Cohesion MK Best Ideas, Driehaus Emerging Market Fund, Ampersand and Citigroup Global Markets; apart from a host of Indian mutual fund and insurance companies. Domestic MFs absorbed 15% of the anchor allotment.

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The QIB portion (net of anchor allocation as explained above) has a quota of 363.93 lakh shares of which it has got bids for 381.14 lakh shares at the close of Day-3, implying a subscription ratio of 1.05 times 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 Inox Green Energy Services Ltd IPO subscription overall, the actual demand did not turn out to be as robust as the anchor.

HNI / NII Portion

The HNI portion got subscribed 0.47X (getting applications for 86.20 lakh shares against the quota of 181.97 lakh shares). That is a rather pathetic performance 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 visible at all as the overall HNI / NII portion could not even manage a simple one time subscription.

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 (B-HNIs) got subscribed 0.39X while the below Rs10 lakh bid category (S-HNIs) got subscribed 0.64X. This is just for information and is already part of the overall HNI bids explained in the previous para. The moral of the story was that the HNIs just did not evince any interest in the IPO of Inox Green Energy Services Ltd.

Retail Individuals

The retail portion was subscribed 4.70X at the close of Day-3, showing steady retail appetite. It must be noted that retail allocation is just 10% in this IPO. For retail investors; out of the 121.31 lakh shares on offer, valid bids were received for only 570.06 lakh shares, which included bids for 495.53 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.61-Rs.65) and has closed for subscription as of the close of Monday, 15th November 2022. The retail oversubscription tends to look a tad magnified due to the low 10% allocation to the retail quota.