Premier Roadlines IPO Subscribed 117.65 times

About the Premier Roadlines IPO

The stock of Premier Roadlines IPO has a face value of ₹10 per share and it is a book built issue. The price for the book building issue is set in the price band of ₹63 to ₹67 per share. Being a book built issue, the final price will be discovered within this band. The IPO of Premier Roadlines Ltd has only a fresh issue component and no offer for sale (OFS) portion. 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, Premier Roadlines Ltd will issue a total of 60,24,000 shares (60.24 lakh shares), which at the upper band IPO price of ₹67 per share aggregates to fresh fund raising of ₹40.36 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 60,24,000 shares (60.24 lakh shares) which at the upper band IPO price of ₹67 per share will aggregate to overall IPO size of ₹40.36 crore.

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 3,04,000 shares. Hem Finlease 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 promoter holding in the company currently stands at 100.00%. However, post the fresh issue of shares in the IPO, the promoter equity holding share will get diluted to 73.65%. The fresh issue funds will be used by the company towards prepayment and repayment of loans taken by the company as well as for purchase of vehicles for commercial purposes and for working capital needs. Hem Securities Ltd will be the lead manager to the issue, and Maashitla Securities Private Ltd will be the registrar to the issue. The market maker is Hem Finlease Private Ltd. The IPO of Premier Roadlines Ltd will be listed on the SME IPO segment of the NSE.

Read more about Premier Roadlines IPO

Final subscription status of Premier Roadlines IPO

Here is the subscription status of the Premier Roadlines IPO  at the close of 14th May 2024.

As can be seen from the above table, the overall IPO of Premier Roadlines Ltd got subscribed an impressive 117.65 times. The HNI / NII portion led the stakes with 180.60 times subscription, followed by the Retail portion at 106.50 times subscription. The QIB portion of the IPO also got a healthy subscription of 89.95 times. That is a very strong and robust 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 strong traction for the IPO across all the three categories of investors; QIB, retail and HNI / NII investors; with all of them well above the median figures.

Allocation quota for various categories

The issue was open for QIBs, retail investors and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, QIB and the HNI / NII segments. A total of 3,04,000 shares were allocated as market maker portion to Hem Finlease Private Ltd, which will act as the 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.

Data Source: NSE

In the above IPO of Premier Roadlines Ltd, the anchor allocation of 17,14,000 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 47.44% of the issue size to 18.99% of the issue size. The anchor allocation bidding opened on May 09th, 2024 and also closed on the same day. A total of 17,17,000 shares were allocated across 7 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹67 per share (which includes face value of ₹10 per share and premium of ₹57 per share).

The total anchor allocation value was worth ₹11.48 crore. The 7 anchor investors who got allotted the full 100% of the anchor portion included; SB Opportunities Fund-I (30.46%), Meru Investment Fund (17.50%), Rajasthan Global Securities (13.19%), Persistent Growth Fund (12.60%), Moneywise Financial Services (8.75%), Saint Capital Fund (8.75%), and Finavenue Capital Trust (8.75%). These 7 anchor investors accounted for 100% of the overall anchor allocation. Out of the anchor shares allocated to investors on May 09th, 2024, a lock in of 30 days will be applicable for 50% of the shares (up to June 14th, 2024) and a lock-in of 90 days will be applicable for the remaining shares (up to August 13th, 2024). The allocation of market maker inventory of 5.05% is outside the anchor portion.

How subscription built up for the IPO of Premier Roadlines IPO?

The oversubscription of the IPO was dominated by the HNI / NII followed by the Retail category and the QIB category in that order. The table below captures the day-wise progression of the subscription status of Premier Roadlines Ltd. The IPO was kept open for 3 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Premier Roadlines Ltd as of the close of the IPO on 14th May 2024.

• The HNI / NII portion got the best subscription in the Premier Roadlines Ltd IPO at 1180.60 times and it got 4.77 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 106.50 times overall and it got 1.25 times subscribed at the end of the first day.
   
• The QIB portion was third in the pecking order in terms of subscription at 89.95 times overall and it got 2.18 times subscribed at the end of the first day.
   
• With the Retail portion, HNI / NII portion and the QIB portion getting fully subscribed on the first day of the IPO itself, the overall IPO also got fully subscribed on Day-1 itself.
   
• The overall IPO which saw subscription of 117.65 times got subscribed at 1.42 times at the close of the first day of the IPO. Let us now turn to how the last day traction on the IPO subscription played out across categories.
   
• Let us start with the HNI / NII portion. The HNI / NII portion saw the total subscription ratio moving from 4.77X to 180.60X on the last day of the IPO. That is a substantial amount of traction on the last day.
   
• Like the HNI / NII portion, even the retail portion saw very good traction on the last day of the IPO. On the final day of the IPO, the total subscription ratio for retail investors moved from 10.91X to 106.50X on the last day of the IPO.
   
• The strong last day traction was the case in the QIB investors also, which is natural as they see most of the flows on the last day. The QIB portion saw the total subscription ratio moving from 2.18X to 89.95X on the last day of the IPO.
   
• Finally, regarding the overall IPO subscription ratio, the move was obviously strongest on the last day of the 3-day IPO. The overall subscription moved from 7.05X to 117.65X on the last day of the IPO.

Next steps after the closure of the IPO

The issue opened for subscription on 10th May 2024 and closed for subscription on 14th May 2024. The basis of allotment will be finalized on 15th May 2024 and the refunds will be initiated on 16th May. In addition, the demat credits are also expected to happen on 16th May 2024 and the stock is scheduled to list on 17th May 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 16th May 2024 under ISIN Number (INE0CFG01012).