Kundan Edifice IPO Final Subscription Status

The IPO of Kundan Edifice IPO closed on Friday, 15th September 2023. The IPO had opened for subscription on 12th September 2023. Let us look at the final subscription status of Kundan Edifice Ltd at the close of subscription on 15th September 2023. It was a fixed price IPO with the price fixed at ₹91 and the stock has a face value of ₹10.

About the Kundan Edifice IPO

Kundan Edifice IPO worth ₹25.22 crore comprises entirely of a fresh issue with no offer for sale (OFS) component. The Fresh Issue portion of Kundan Edifice Ltd entails the issue of 27.72 lakh shares which at the fixed IPO price of ₹91 per share aggregates to ₹25.22 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 1,200 share each. Thus, the minimum investment of ₹109,200 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs / NIIs can invest in a minimum of 2 lots of 2,400 shares worth ₹218,400 as the bare minimum investment. There is no upper limit for the HNI / NII category or even for the QIB category. Kundan Edifice Ltd will deploy the funds for working capital needs and for general corporate purposes. Post the IPO, the promoter equity in the company will get diluted from 99.00% to 72.28%. The issue is lead managed by Fedex Securities Private Ltd, while Cameo Corporate Services Ltd will be the registrars to the issue. Let us now turn to the final subscription details of the IPO as of the close of subscription on 15th September 2023.

Kundan Edifice IPO Final Subscription Status

Here is the subscription status of the Kundan Edifice IPO as at close on 15-Sep-2023.

The issue was open for retail investors, QIBs and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the retail and the HNI NII. HNIs / NIIs and QIBs were clubbed under one single non-retail quota. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 1,41,600 shares were allocated as market maker portion to Gretex Share Broking Ltd, which will act as a market maker 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.

As can be seen, from the above table, the company does not have any QIB quota and hence has not done any allocation for anchor investors. Hence, the entire quota for retail and non-retail is available as part of the public issue only.

How subscription built up for the IPO of Kundan Edifice Ltd

The oversubscription of the IPO was dominated by the HNI / NIIs followed by the retail investors and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Kundan Edifice IPO.

It is clear from the above table that while the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion got fully subscribed only on the third day even as the IPO subscription was open for 4 full days. However, the overall IPO was fully subscribed on the first day itself although most of the traction was seen on the last day. All the categories of investors viz., HNIs / NIIs and retail categories saw good traction and build up of interest on the last day of the IPO. There is an allocation of 141,600 shares to Gretex Share Broking Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

The IPO of Kundan Edifice Ltd opened for subscription on 12th September 2023 and closed for subscription on 15th September 2023 (both days inclusive). The basis of allotment will be finalized on 21st September 2023 and the refunds will be initiated on 22nd September 2023. In addition, the demat credits are expected to happen on 25th September 2023 and the stock is scheduled to list on 26th September 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.

A quick word on Kundan Edifice Ltd and the SME IPO

Kundan Edifice Ltd was incorporated in 2010 and is engaged in manufacturing, assembly and marketing of light emitting diodes (LED) strip lights. Kundan Edifice Ltd is actually a master designer and manufacturer and is classified as an ODM company or an Original Design Manufacturer company. It designs, develops, and also manufactures these LED light strips at its own facilities and then supplies it to other client companies. Then, these companies distribute under their own brands and many of the large brands also avail the services of Kundan Edifice Ltd. It is like a form of higher end EMS service for customers. In addition, Kundal Edifice Ltd also provides specialized customized products like HV(high voltage) Flex, LV (low voltage) flex, RGB Flex and the complete accessories kit. Kundan Edifice Ltd has two manufacturing and assembly facilities located at Vasai and Bhiwandi in Maharashtra. The company employs over 270 workers in its factories, including contract workers.

Kundan Edifice has tried to position the company as a one-stop solution for all the lighting needs. The overall solution offered by Kundan Edifice Ltd to its clients include tech info clarity, drawing design, sample for confirmation, production trails, actual production, branding, packaging, and all relevant logistics management. The products manufactured by Kundan Edifice Ltd find application in areas like cove lighting, profile lighting, car interiors, car exteriors, two-wheelers, indoor decorations, festival decorations, signages, back-lit panel for outdoor advertising, outdoor decorations, underwater lighting, decoration of building facades, lighting for construction demarcation, neon flex lights and other decorative lights and articles for enhancing the feel of homes and offices.

The company was promoted by Divyansh Gupta and Vijaya Gupta while Mallika Gupta and Shubhang Gupta are also part of the promoter group. The promoter holding (including the promoter group) in the company currently stands at 99%. However, post the fresh issue of shares and the IPO, the promoter equity holding share will be diluted. The fresh funds will be used for meeting the incremental working capital needs as well as general corporate purposes. While Fedex Securities Private Ltd will be the lead manager to the issue, Cameo Corporate Services Ltd will be the registrar to the issue.