Polysil Irrigation Systems IPO Subscribed 6.88 times

Final subscription status of Polysil Irrigation Systems IPO

Here is subscription status of Polysil Irrigation Systems IPO at close on 13th February 2024.

As can be seen from the above table, the overall IPO of Polysil Irrigation Systems Ltd got subscribed a rather subdued 6.88 times. The Retail Investor portion led the stakes with 11.62 times subscription, followed by the HNI / NII portion at 2.12 times subscription. There was no dedicated QIB allocation in this IPO. That is a very subdued 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 both the categories of investors; retail and HNI / NII investors.

Allocation quota for various categories

The issue was open for retail investors and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, and the HNI / NII segments. A total of 1,64,000 shares were allocated as market maker portion to Market Hub Stock Broking Private 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. 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 Polysil Irrigation Systems Ltd, there is no QIB allocation in the IPO. The anchor allocation to the anchor investors is normally done 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 5.08% is outside the anchor portion. The market making portion is more towards ensuring liquidity post listing and ensuring low basis spreads on the stock.

How subscription built up for the IPO of Polysil Irrigation Systems Ltd

The oversubscription of the IPO was dominated by the HNI / NII investors followed by the Retail Investor category in that order. The table below captures the day-wise progression of the subscription status of Polysil Irrigation Systems 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 Polysil Irrigation Systems Ltd.

• The Retail got the best subscription in the Polysil Irrigation Systems Ltd IPO at 11.62 times and it got 1.52 times subscribed on the first day of the IPO itself.
   
• The HNI / NII portion was behind the retail portion in terms of subscription at 2.12 times overall and it got 0.21 times subscribed at the end of the first day.
   
• While the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion also got fully subscribed only on the fourth and final day of the IPO. As a result, the overall IPO also got fully subscribed on the second day of the IPO. The overall IPO, which saw subscription of 6.88 times at close, got subscribed at just 0.87 times at the close of the first day itself.
   
• 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 0.88X to 2.12X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 7.40X to 11.62X on the last day of the IPO.
   
• The last day traction story was true regarding the overall IPO subscription ratio also. The subscription ratio overall moved from 4.14X to 6.88X on the last day of the IPO.

Next steps in the IPO process for Polysil Irrigations Systems Ltd

With the IPO closed for subscription at the end of 13th February, 2024, 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 14th February, 2024 and the refunds will be initiated on 15th February, 2024. In addition, the demat credits are also expected to happen on 15th February, 2024 and the stock is scheduled to list on 16th 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 15th February 2024 under ISIN Number (INE517M01028).