Rajgor Castor Derivatives IPO subscribed 107.43 times

About the Rajgor Castor Derivatives IPO

The IPO of Rajgor Castor Derivatives Ltd opened for subscription on 17th October 2023 and closed for subscription on 20th October 2023. The face value of the stock is ₹10 per share and it is a book building issue. The price band for the book built issue has been fixed in the range of ₹47 to ₹50 per share, with actual price discovery to happen post the IPO. The IPO of Rajgor Castor Derivatives Ltd has a fresh issue component and an offer for sale (OFS) portion. The fresh issue portion of the IPO entails the issue of 88,95,000 shares (88.95 lakh shares), which at the upper IPO price band of ₹50 per share aggregates to a fresh issue size of ₹44.48 crore. As part of the OFS, the promoters will sell a total of 6,66,000 shares (6.66 lakh shares), which at the upper IPO price band of ₹50 per share aggregates to total OFS size of ₹3.33 crore. As a result, the total issue size of Rajgor Castor Derivatives Ltd will entail the issue of 95,61,000 shares (95.61 lakh shares), which at the upper IPO price band of ₹50 per share aggregates to a total issue size of ₹47.81 crore.

The minimum lot size for the IPO investment will be 3,000 shares. Thus, retail investors can invest a minimum of ₹150,000 (3,000 x ₹50 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 6,000 shares and having a minimum lot value of ₹300,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories. The IPO of Rajgor Castor Derivatives Ltd has a market maker allocation of 5,01,000 shares with Spread X Securities Ltd being the market maker. They will provide two-way quotes to ensure liquidity on the counter post listing and low basis costs. Post the IPO, the promoter stake will dilute from 78.01% to 57.40%. The company will use the fresh funds for branding and marketing as well as for the expenses of app development and working capital needs. Beeline Capital Advisors Private Ltd is the IPO lead manager and Link Intime India Private Ltd is the IPO registrar.

Final subscription status of Rajgor Castor Derivatives IPO

Here is the subscription status of the Rajgor Castor Derivatives IPO as at close on 20th October 2023.

As can be seen from the above table, the overall IPO of Rajgor Castor Derivatives Ltd  got subscribed an impressive 107.43 times. The HNI / NII portion led the stakes with 260.01 times subscription, followed by the Retail portion at 80.70 times subscription and the QIB portion at 35.52 times; in that order. That is a very strong and smart 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, HNI / NII investor  and the QIBs. There was a broad quota designed for each of the segments viz. the retail, the QIB 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 5,01,000 shares were allocated as market maker portion to Spread X 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 for the traders in the counter.

The anchor allotment, which is normally done a day ahead of the IPO, opened and closed on 16th October 2023. The anchor allocation is normally giving an indication to the retail and other investors about the institutional appetite for the IPO. A total of 27.12 lakh shares were allocated to a total of 7 anchor investors a day ahead of the IPO opening. The allocation was done at the upper price band of ₹50 per share, which included a share premium of ₹40 per share, over and above the face value of ₹10 per share. The company raised ₹13.56 crore from the anchor investors amounting to 28.73% of the overall IPO size.

How subscription built up for the IPO of Rajgor Castor Derivatives Ltd

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 Rajgor Castor Derivatives Ltd  IPO.

Here are the key takeaways from the subscription numbers on a day-wise basis for Rajgor Castor Derivatives Ltd. The IPO was kept open for 4 days in total.

• The HNI / NII portion got the best subscription in the Rajgor Castor Derivatives Ltd IPO and it got 260.01 times subscribed, with full subscription on Day-1 itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription and it got 80.70 times subscribed, with the retail portion also fully subscribed on Day-1 itself.
   
• The QIB portion was at the lowest subscription with total subscription of 35.52 times, with the QIB portion fully subscribed on Day-1 itself; in fact, over 10 times on Day-1.
   
• With the HNI / NII portion, retail portion and QIB portion getting fully subscribed on the first day of the IPO itself, even the overall IPO got fully subscribed on the first day of the IPO itself. At the end of the IPO on Day-4, the overall subscription stood at 107.43 times.
   
• The retail and the HNI portion saw the best traction on the fourth and last day of the IPO. The HNI portion saw the total subscription ratio moving from 10.35X to 260.01X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 26.56X to 80.70X 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 QIB portion and the overall IPO also saw smart traction on the last day. On the last day of the IPO, the QIB portion moved from 10.79X to 35.52X, while the overall IPO subscription moved from 18.65X to 107.43X on the last day.

With the IPO closed for subscription at the end of October 20, 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 26th October 2023 while the refunds would be initiated on 27th October 2023. The shares of Rajgor Castor Derivatives Ltd (ISIN - INE0BZQ01011) would be credited to the demat accounts of eligible shareholders by the close of 30th October 2023 while the stock of Rajgor Castor Derivatives Ltd is expected to be listed on 31st October 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.