Master Components IPO Closing Subscription Details

Master Components IPO closed on Thursday, 21st September 2023. The IPO had opened for subscription on 18th September 2023. Let us look at the final subscription status of Master Components Ltd at the close of subscription on 21st September 2023. It was a fixed price IPO with the price being fixed at ₹140 per share and the stock has a face value of ₹10 per share.

About the Master Components IPO

The ₹15.43 crore of Master Components IPO comprises of a combination of a fresh issue and an offer for sale (OFS) component. The Fresh Issue portion of Master Components Ltd entails the issue of 7 lakh shares which at the fixed IPO price of ₹140 per share aggregates to ₹9.80 crore. The offer for sale (OFS) portion of Master Components Ltd entails the sale of 4.02 lakh shares which at the fixed IPO price of ₹140 per share aggregates to ₹5.63 crore. Therefore, the overall Issue size of Master Components Ltd entails the issue of 11.02 lakh shares which at the fixed IPO price of ₹140 per share aggregates to ₹15.43 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 1,000 share each. Thus, the minimum investment of ₹140,000 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 2,000 shares worth ₹280,000 as the bare minimum investment. There is no upper limit for the HNI / NII category or even for the QIB category. Master Components 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 100.00% to 72.41%. The issue is lead managed by Aryaman Financial Services Ltd, while Bigshare Services Private 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 21st September 2023.

Final subscription status of Master Components Ltd

Here is the subscription status of the Master Components IPO as at close on 21st September 2023.

The issue was open for retail investors, and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the retail and the HNI / NII under the broad umbrella of non-retail quota. A total of 56,000 shares were allocated as market maker portion to Aryaman Capital Markets, 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. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

There is no dedicated anchor allocation in the issue as can be seen from the table above, largely as there is no dedicated QIB quota reserved. The IPO has allocated 5.08% for the market maker inventory and the balance shares (also called the net offer) has been distributed equally among the retail investors and the non-retail investors.

How subscription built up for the Master Components IPO

The oversubscription of the IPO was dominated by the retail investors followed by the non-retail (predominantly HNI / NII investors), in that order. The table below captures the day-wise progression of the subscription status of Master Components Ltd IPO.

It is clear from the above table that while the HNI / NII portion got fully subscribed on the first day of the IPO itself, the retail portion got fully subscribed only on the second day even as the overall IPO got just about fully subscribed at the close of the first day. Both 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 56,000 shares to Aryaman Capital Markets 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 overall response to the IPO has been relatively tepid compared to previous SME IPOs in recent times.

The IPO of Master Components Ltd opened for subscription on 18th September 2023 and closed for subscription on 21st September 2023 (both days inclusive). The basis of allotment will be finalized on 26th September 2023 and the refunds will be initiated on 27th September 2023. In addition, the demat credits are expected to happen on 28th September 2023 and the stock is scheduled to list on 29th 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 Master Components Ltd and the SME IPO

Master Components Ltd was incorporated in 1999 to engage in the manufacture of plastic engineering components and sub-assemblies. Its primary business is the molding of materials to produce new components for electrical, medical, industrial, and automotive sector applications. Among the specific molding products made by Master Components Ltd are Thermoplastic Injection Molding, Thermoset Injection Molding, Thermoset transfer molding and Compression Molding. The company has a manufacturing facility in Nashik, Maharashtra, which has a capacity ranging from 60 to 450 tonnes and the range of the product models go from 1 gram to 1,500 grams. Master Components Ltd has 3 factories and also owns Master Mould Private Ltd, a designing and manufacturing company for all types of injection, compression, and transfer molds.

The company has been promoted by Mudduraj Kulkarni, Shrikant Joshi, Rajeshwari Kulkarni and Anagha Joshi. The promoter holding in the company currently stands at 100.00%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will get diluted to 72.41%. The fresh issue funds will be used by the company for meeting its working capital needs and for general corporate expenses. Part of the funds will also be applied towards the cost of the fund raising. While Aryaman Financial Services Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Aryaman Capital Markets Ltd.