Interiors and More IPO Subscribed 11.22 times

About the Interiors and More IPO

The stock of Interiors and More IPO has a face value of ₹10 per share and it is a book building issue. The price for the book building issue is set in the price band of ₹216 to ₹227 per share. Being a book built issue, the price will be discovered in the above band. The IPO of Interiors and More Ltd 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, Interiors and More IPO will issue a total of 18,50,400 shares (18.504 lakh shares), which at the upper band of IPO price of ₹227 per share aggregates to fresh fund raising of ₹42.00 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 18,50,400 shares (18.504 lakh shares) which at the upper band IPO price of ₹227 per share will aggregate to overall IPO size of ₹42.00 crore.

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 93,000 shares. Gretex Share Broking Private 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. Post the IPO, the promoter stake in the company will get diluted from 95.08% to 69.93%. The fresh issue funds will be used by the company towards working capital funding at its plants and for repayment and prepayment of higher cost loans. Gretex Corporate Services 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 Gretex Share Broking Private Ltd.

Final subscription status of Interiors and More IPO

Here is the subscription status of the Interiors and More IPO as at close on 20th February 2024.

As can be seen from the above table, the overall IPO of Interiors and More Ltd got subscribed a very modest 11.22 times. The HNI / NII portion led the stakes with 30.32 times subscription, followed by the Retail portion at 7.41 times subscription. The QIB portion of the IPO also got a very modest subscription of 3.54 times. That is a very modest and tepid 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 shown very limited traction for the IPO across all the three categories of investors; QIB, retail and HNI / NII investors.

Allocation quota for various categories

The issue was open for QIBs, retail investors and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, QIB and the HNI / NII segments. A total of 93,000 shares were allocated as market maker portion to Gretex Share Broking Private Ltd, which will act as the 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 Interiors and More Ltd, the anchor allocation of 5,26,200 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 47.43% of the issue size to 18.99% of the issue size. The anchor allocation bidding opened on February 14th, 2024 and also closed on the same day. A total of 5,26,200 shares were allocated across 3 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹227 per share (which includes face value of ₹10 per share and premium of ₹217 per share).

The total anchor allocation value was worth ₹11.94 crore. The 3 anchor investors got allocated 100% of the anchor quota between them. These 3 anchor investors were; Meru Investment Fund PCC Cell (24.97%), Saint Capital Fund (50.17%), and AG Dynamic Fund Ltd (24.86%). These 3 anchor investors accounted for 100% of the overall anchor allocation. Out of the anchor shares allocated to investors on February 14th, 2024, a lock in of 30 days will be applicable for 50% of the shares (up to March 22nd, 2024) and a lock-in of 90 days will be applicable for the remaining shares (up to May 21st, 2024). The allocation of market maker inventory of 5.03% is outside the anchor portion.

How subscription built up for the Interiors and More IPO

The oversubscription of the IPO was dominated by the HNI / NII followed by the Retail category and the QIB category in that order. The table below captures the day-wise progression of the subscription status of Interiors and More Ltd. The IPO was kept open for 4 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Interiors and More Ltd.

• The HNI / NII portion got the best subscription in the Interiors and More Ltd IPO at 30.32 times and it got 0.08 times subscribed on the first day of the IPO.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 7.41 times overall and it got 0.39 times subscribed at the end of the first day.
   
• The QIB portion was third in the pecking order in terms of subscription at 3.54 times overall and it got 0.00 times subscribed at the end of the first day.
   
• While the QIB portion and the HNI / NII portion got fully subscribed only on the last day, the retail portion got fully subscribed on the third day of the IPO. As a result, the overall subscription was also filled up only on the last day of the IPO. The overall IPO which saw subscription of 11.22 times got subscribed at just 0.21 times at the close of the first day of the IPO.
   
• The retail, and 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 0.69X to 30.32X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 1.37X to 7.41X on the last day of the IPO.
   
• The last day traction story was true for QIBs and the overall IPO also. The QIB portion saw the total subscription ratio moving from 0.00X to 3.54X on the last day of the IPO. Finally, regarding the overall IPO subscription ratio, it also moved from 0.83X to 11.22X on the last day of the IPO.

Overall, the IPO of Interiors and More Ltd has got very tepid subscription, but that should improve the chances of allotment for investors.

Next steps after the closure of the IPO

The issue opened for subscription on 15th February 2024 and closed for subscription on 20th February 2024 (both days inclusive). The basis of allotment will be finalized on 21st February 2024 and the refunds will be initiated on 22nd February 2024. In addition, the demat credits are expected to happen on 22nd February 2024 and the stock is scheduled to list on 23rd February 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 February 2024 under ISIN Number (INE0OPC01015).