On Door Concepts IPO Subscribed 5.59 times

About the On Door Concepts IPO

The IPO of On Door Concepts Ltd opened for subscription on 23rd October 2023 and closed for subscription on 27th October 2023; both days inclusive. The company stock has a face value of ₹10 per share and it is a fixed price issue with the IPO priced at ₹208 per share. The IPO of On Door Concepts Ltd has only a fresh issue component with no book built portion. As part of the fresh portion of the IPO, On Door Concepts Ltd will issue a total of 14,98,800 shares (14.99 lakh shares approximately), which at the fixed IPO price of ₹208 per share aggregates to a fresh issue fund raising of ₹31.18 crore. Since there is no offer for sale portion, the total size of the fresh issue will also be the total size of the IPO. Hence the total IPO size will comprise of 14,98,800 shares, which at the fixed IPO price of ₹208 per share aggregates to a total IPO size of ₹31.18 crore for On Door Concepts Ltd.

Like every SME IPO, On Door Concepts Ltd also has allocated a market making portion with market maker inventory allocation of 86,400 shares. The market maker for the issue is BHH Securities Ltd and they will provide two-way quotes to ensure liquidity on the counter post listing as well as low basis costs. The promoter holding in On Door Concepts Ltd pre-IPO is at 51.92%, but will dilute to 38.14% post the IPO. The company will use the fresh funds for meeting its additional working capital needs and for general corporate expenses. First Overseas Capital Ltd will be the lead manager to the issue and Bigshare Services Private Ltd will be the registrar to the issue.

Final subscription status of On Door Concepts IPO

Here is the subscription status of the On Door Concepts IPO as at close on 27th October 2023.

As can be seen from the above table, the overall IPO of On Door Concepts Ltd got subscribed a very modest 5.59 times. The retail portion led the stakes with 7.87 times subscription, followed by the HNI / NII portion at 3.16 times subscription. That is a very tepid and modest response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past.

Allocation quota for various categories

The issue was open for retail investors, and the non-retail investors. Typically, the non-retail investors predominantly comprise of the HNI / NII category. There was a broad quota designed for each of the segments viz. the retail and the HNI NII. 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 86,400 shares were allocated as market maker portion to BHH Securities Ltd, which will act as 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 by offering fine bid-ask spreads.

The anchor allotment is normally done a day ahead of the IPO opening. However, in the case of the IPO of On Door Concepts Ltd IPO, they had not allotted any specific QIB quota. The company also did not do any anchor placement ahead of the IPO opening. The only allocation done was the 5.76% of the total equity being allocated to the market makers of the IPO to provide buy and sell bid/ask spreads for the stock post listing. The net issue (net of the market maker quota) was distributed equally between the retail portion and the HNI / NII portion as evidenced in the allocation shown above.

How subscription built up for the On Door Concepts IPO

The oversubscription of the IPO was dominated by the Retail category followed by the HNI / NII category in that order. The table below captures the day-wise progression of the subscription status of On Door Concepts Ltd IPO. The IPO was kept open for 4 days in all.

Here are the key takeaways from the subscription numbers on a day-wise basis for On Door Concepts Ltd.

• The retail portion got the best subscription in the On Door Concepts Ltd IPO at 7.87 times and it got 1.53 times subscribed on the first day itself.
   
• The HNI / NII portion was behind the retail portion in terms of subscription and it got 3.16 times subscribed overall with 0.39 times subscription at the end of the first day.
   
• With the retail portion getting fully subscribed on the first day of the IPO itself, the HNI / NII portion got fully subscribed only on the second day of the IPO. Even the overall IPO got fully subscribed only on the second day of the IPO.
   
• The retail and the HNI portion saw the best traction on the last day of the IPO. The HNI portion saw the total subscription ratio moving from 1.59X to 3.16X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 5.47X to 7.87X on the last day of the IPO.
   
• Just as the retail portion and the HNI portion saw the best incremental traction on the last day of the IPO, the overall IPO also saw smart traction on the last day with the subscription ratio for the overall IPO moving from 3.61X to 5.59X on the last day.

With the IPO closed for subscription at the end of October 27th, 2023, the next piece of action shifts to the finalization of the basis of allotment and later to the listing of the IPO. The basis of allotment will be finalized on 01st November 2023 while the refunds would be initiated on 02nd November 2023. The shares of On Door Concepts Ltd (ISIN - INE00ER03052) would be credited to the demat accounts of eligible shareholders by the close of 03rd November 2023 while the stock of On Door Concepts Ltd is expected to be listed on 06th November 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.