Magenta Lifecare IPO Subscription Status

Magenta Lifecare - IPO subscription Status on Day-3

As of 5.25 pm on 07th June 2024, out of the 18.96 lakh shares on offer in the BSE SME IPO (excluding the market maker portion and the anchor allocation done), Magenta Lifecare saw bids for 18,642.28 lakh shares. This implies an overall subscription of 983.24X at a macro level at the close of Day-3 of the IPO. The granular break-up of subscriptions as of the close of Day-3 of the Magenta Lifecare IPOwas as under:

The subscriptions were led by the HNI / NII investors followed by the Retail investors. There is no dedicated QIB allocation in this issue. The NII / HNI bids will typically gather most of the momentum on the last day, and that was the case in this issue also in the case of the HNI / NII bids. The NII bids pick up momentum on the last day since that is when the bulk HNI funding bids, corporate bids and the large HNI bids come in. Here are the details of the category-wise subscription. The overall subscription ratio calculation excludes anchor portion (if any) and also the market making portion in the BSE SME IPO.

Data Source: NSE

The IPO was open up to June 07, 2024, and as of the close of Friday, the IPO has closed for subscription and these are the final subscription numbers. As of June 07, 2024, the status is updated as of the close of the IPO and these are the final subscription numbers. The QIB and the HNI / NII categories generally see the best momentum coming only on the last and final day of the IPO, while the retail investors predominate on the first two days of the IPO. The market maker portion and anchor quota (if any) are excluded for the purpose of calculating the number of times the IPO was subscribed; to get a realistic picture of the IPO subscription story. The stock of Magenta Lifecare is a fixed price issue at ₹35 per share. The issue has closed for subscription on 07th June 2024. The credits to the demat account will happen by the close of 11th June 2024 under ISIN (INE0QZ901011).

Magenta Lifecare - IPO subscription Status on Day-2

As of 5.10 pm on 06th June 2024, out of the 18.96 lakh shares on offer in the BSE SME IPO (excluding the market maker portion and the anchor allocation done), Magenta Lifecare saw bids for 2,290.48 lakh shares. This implies an overall subscription of 120.81X at a macro level at the close of Day-2 of the IPO. The granular break-up of subscriptions as of the close of Day-2 of the Magenta Lifecare IPO was as under:

The subscriptions were led by the retail investors followed by the HNI / NII investors. There is no dedicated QIB allocation in this issue. The NII / HNI bids will typically gather most of the momentum on the last day, and that would be the case in this issue also in the case of the HNI / NII bids. The NII bids pick up momentum on the last day since that is when the bulk HNI funding bids, corporate bids and the large HNI bids come in. Here are the details of the category-wise subscription. The overall subscription ratio calculation excludes anchor portion (if any) and also the market making portion in the BSE SME IPO.

Data Source: NSE

The IPO is open up to June 07, 2024, at which point we will know the final subscription status of the IPO. As of today, the status is only updated as of the end of Day-2 of the IPO. The QIB and the HNI / NII categories see the best momentum coming only on the last and final day of the IPO, while the retail investors predominate on the first two days of the IPO. The market maker portion and anchor quota (if any) are excluded for the purpose of calculating the number of times the IPO was subscribed; to get a realistic picture of the IPO subscription story. The stock of Magenta Lifecare is a fixed price issue at ₹35 per share. The issue closes for subscription on 07th June 2024. The credits to the demat account will happen by the close of 11th June 2024 under ISIN (INE0QZ901011).

Magenta Lifecare - IPO subscription Status on Day-1

As of 5.17 pm on 05th June 2024, out of the 18.96 lakh shares on offer in the BSE SME IPO (excluding the market maker portion and the anchor allocation done), Magenta Lifecare saw bids for 464.40 lakh shares. This implies an overall subscription of 24.49X at a macro level at the close of Day-1 of the IPO. The granular break-up of subscriptions

as of the close of Day-1 of the Magenta Lifecare IPO was as under:

The subscriptions were led by the retail investors followed by the HNI / NII investors. There is no dedicated QIB allocation in this issue. The NII / HNI bids will typically gather most of the momentum on the last day, and that would be the case in this issue also in the case of the HNI / NII bids. The NII bids pick up momentum on the last day since that is when the bulk HNI funding bids, corporate bids and the large HNI bids come in. Here are the details of the category-wise subscription. The overall subscription ratio calculation excludes anchor portion (if any) and also the market making portion in the BSE SME IPO.

Data Source: NSE

The IPO is open up to June 07, 2024, at which point we will know the final subscription status of the IPO. As of today, the status is only updated as of the end of Day-1 of the IPO. The QIB and the HNI / NII categories see the best momentum coming only on the last and final day of the IPO, while the retail investors predominate on the first two days of the IPO. The market maker portion and anchor quota (if any) are excluded for the purpose of calculating the number of times the IPO was subscribed; to get a realistic picture of the IPO subscription story.

Magenta Lifecare – Share Allocation Across Categories

The table below captures the break-up of the overall share allocation to retail investors and to the HNI / NII investors. The anchor allotment is carved out of the QIB quota (if any) and the QIB quota is reduced accordingly. The market maker allocation is the inventory that will be used by the market maker to provide liquidity in the counter post listing, to keep the bid-ask spreads low and reduce the risks of trading in the stock. The company has appointed Sunflower Broking Private Ltd as the market maker and assigned a market making inventory of 1,04,000 shares to them. The market maker will use this inventory to offer buy and sell quotes to keep the counter liquid and reduce the basis risk on the stock post listing.

Data Source: Company RHP

In the above IPO of Magenta Lifecare, there is no dedicated QIB allocation in the IPO. The anchor allocation to the anchor investors is normally carved out of this QIB allocation and hence the company has not done any anchor allocation in the IPO. Normally, the anchor is done to institutional investors, which gives confidence and assurance to the retail shareholders about the institutional interest in the stock The anchor allocation is normally adjusted and deducted from the QIB quota and only the net number of shares is available for public issue under the QIB portion. 

However, in this case, there is neither any QIB quota, nor any anchor allocation to investors ahead of the IPO. Normally, the anchor portion bidding is done on the day before the IPO opens and such anchor investments are subjected to lock in at two levels. Half the anchor allocation is locked in for 30 days while the balance anchor allocation shares are locked in for a period of 90 days. The allocation of market maker inventory of 15.64% is outside the anchor portion. The market making portion is more towards ensuring liquidity post listing and ensuring low basis spreads on the stock.

About the IPO of Magenta Lifecare

The stock of Magenta Lifecare has a face value of ₹10 per share and it is a fixed price issue. The price for the fixed price issue is set at ₹35 per share. Being a fixed price issue, the question of price discovery does not arise. The IPO of Magenta Lifecare has only a fresh issue component and no offer for sale (OFS) portion. While 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 IPO, Magenta Lifecare will issue a total of 20,00,000 shares (20.00 lakh shares), which at the fixed IPO price of ₹35 per share aggregates to fresh fund raising of ₹7.00 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 20,00,000 shares (20.00 lakh shares) which at the fixed IPO price of ₹35 per share will aggregate to overall IPO size of ₹7.00 crore.

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 1,04,000 shares. Sunflower 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. The company has been promoted by Divyesh Modi and Khyati Modi. The promoter holding in the company currently stands at 84.06%. However, post the fresh issue of shares in the IPO, the promoter equity holding share will get diluted to 59.59%. The fresh issue funds will be used by the company towards mainly funding the working capital gaps in the regular operations of the company. Fedex Securities Private Ltd will be the lead manager to the issue, and Cameo Corporate Services Ltd will be the registrar to the issue. The market maker for the issue is Sunflower Broking Private Ltd. The IPO of Magenta Lifecare will be listed on the SME IPO segment of the BSE.

Next Steps in the Magenta Lifecare IPO process

The issue opened for subscription on 05th June 2024 and closes for subscription on 07th June 2024 (both days inclusive). The basis of allotment will be finalized on 10th June 2024 and the refunds will be initiated on 11th June 2024. In addition, the demat credits are expected to also happen on 11th June 2024 and the stock will list on 12th June 2024 on the BSE SME IPO segment. The credits to the demat account to the extent of shares allotted will happen by the close of 11th June 2024 under ISIN (INE0QZ901011).