Ratnaveer Precision Engineering IPO subscribed 93.99 times at close

Ratnaveer Precision Engineering IPO worth ₹165.03 crore, consisted of a combination of fresh issue and offer for sale. The fresh issue was to the tune of ₹135.24 crore while the offer for sale (OFS) was worth ₹29.79 crore. The IPO pricing was done in the band of ₹93 to ₹98 per share with the final price to be discovered through the process of book building. While the QIB portion only picked up traction on the last day, the retail portion and the HNI / NII portion saw traction from the first day itself. The table below capture the day-wise progress on IPO subscription for Ratnaveer Precision Engineering Ltd.

As can be seen from the above tabular analysis, the Ratnaveer Precision Engineering IPO got fully subscribed on the first day of the IPO overall. While the retail and the HNI / NII portion got fully subscribed on the first day of the IPO itself, the QIB portion got fully subscribed only on the second day. Specifically, the QIB portion and the HNI / NII portion saw the best traction on subscription only on the last day of the IPO.

Quick update on the overall IPO response

The IPO saw fairly steady response on Day-1 and Day-2 of the IPO and closed with rather healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, Ratnaveer Precision Engineering Ltd IPO was subscribed 93.99X overall, with best demand coming from the HNI / NII segment, followed by the QIB segment and the retail segment in that particular order. In fact, the institutional segment saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion got fully subscribed on Day-1 and built up heft gradually. Firstly, let us look at the details of overall allocation.

As can be seen from the above table, the QIB portion had 50% quota, of which 30% got absorbed in the anchor allotment itself, with only the residual 20% available in the actual IPO. This oversubscription of the QIB segment refers to this residual 20% only.

As of close of 06th September 2023, out of the 117.88 lakh shares on offer in the IPO, Ratnaveer Precision Engineering Ltd saw bids for 11,079.75 lakh shares. This implies an overall subscription of 93.99X overall. The granular break-up of subscriptions was in favour of the HNI / NII investors followed by the QIB investors while the retail portion got the lowest subscription among the various categories. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Subscription status of QIB Portion

Let us first talk about the pre-IPO anchor placement. On 01st September 2023, Ratnaveer Precision Engineering Ltd did an anchor placement with 30% of the IPO size getting absorbed by the anchors. Out of the 1,68,40,000 shares on offer, the anchors picked up 50,52,000 shares accounting for 30% of the total IPO size. The anchor placement reporting was made to the BSE late on 01st September 2023. The IPO of Ratnaveer Precision Engineering Ltd opened on 04th September 2023 in the price band of ₹93 to ₹98 and closed for subscription on 06th September 2023 (both days inclusive). The entire anchor allocation was made at the upper price band of ₹98 (comprising of face value of ₹10 and premium of ₹88 per share). Here are the details of the anchor allocation with the principal subscriber names and quantity absorbed for those with the highest allocation. It represents 100%.

Data Source: BSE Filings

The 6 anchor investors above accounted for 100% of the overall anchor allocation. The QIB portion (net of anchor allocation as explained above) had a quota of 33.68 lakh shares of which it has got bids for 4,481.17 lakh shares at the close of Day-3, implying a subscription ratio of 133.05X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Ratnaveer Precision Engineering Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 135.21X (getting applications for 3,415.50 lakh shares against the quota of 25.26 lakh shares). That is a very strong response at the close of Day-3 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was visible as the overall HNI / NII portion added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 130.63X while the below ₹10 lakh bid category (S-HNIs) got subscribed 144.38X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed by a healthy 54.01X at the close of Day-3, showing steady to strong retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 58.94 lakh shares on offer, valid bids were received for 3,183.08 lakh shares, which included bids for  2,741.63 lakh shares at the cut-off price. The cut-off bidding is a special facility extended to retail investors wherein the bids can be simply put in at cut-off (without mentioning a bid price) to improve chances of allotment. The IPO is priced in the band of (₹93 to ₹98) and has closed for subscription as of the close of Wednesday , 07th September 2023.

Read about Ratnaveer Precision Engineering

Brief on the business model of Ratnaveer Precision Engineering Ltd

Ratnaveer Precision Engineering Ltd was incorporated in 2002 and the company currently manufactures stainless steel finished sheets, washers, solar roofing hooks, pipes, and tubes. Most of its specialized products are stainless based products. It customizes such stainless products for use in industries like automobiles, solar power, wind energy, power plants, hydrocarbons, pharmaceuticals, plumbing, instrumentation, electromechanics, architecture, building & construction etc. Some of its new product launches include circlip, spring washers, retaining rings, toothed lock washers, serrated lock washers etc. The company produces more than 2,500 washers in different sizes and adhering to international standards. The company is also a star rate export house, recognized by government of India.

Ratnaveer Precision Engineering has 4 manufacturing units. Out of these,  two manufacturing units i.e., Unit-I and Unit-II are located at the Gujarat Industrial Development Corporation (GIDC), Vadodara, Gujarat. The third unit; Unit-III is located at Waghodia, which is also in Vadodara, Gujarat. The fourth unit, Unit-IV, is located at GIDC, Vatva near to Gujarat’s commercial capital of Ahmedabad. Broadly, Ratnaveer Precision Engineering Ltd manufacturers SS finishing sheets, SS washers and SS solar mounting hooks at Unit I, while it manufactures SS pipes & tubes at Unit II. The remaining two units viz. Unit III and Unit IV are dedicated to the backward integration process, which actually supply inputs to Unit 1 and 2. Unit III is the melting unit where melted steel scrap is turned into steel ingots, and Unit IV is the rolling unit where flat ingots are further processed into SS sheets; the principal raw materials for SS washers.

The fresh funds raised in the IPO would be applied for filling the working capital funding gaps and for general corporate purposes. The IPO of Ratnaveer Precision Engineering Ltd will be lead managed by Unistone Capital Private ltd. For managing the shareholder records, Link Intime India Private Ltd will be the registrars to the issue.