S J Logistics (India) IPO Final Subscription 316.26 times

About the S J Logistics (India) Limited IPO

The IPO of S J Logistics (India) Ltd opened for subscription on 12th December 2023 and closed for subscription on 14th December 2023. The stock of S J Logistics (India) Ltd has a face value of ₹10 per share and it is a book building issue. The issue price for the fresh issue IPO had been fixed in the price band of ₹121 to ₹125 per share, with the final price to be discovered within this band. The IPO of S J Logistics (India) Ltd has only a fresh issue component with no book built portion; hence it would be entirely EPS and equity dilutive. As part of the fresh issue portion of the IPO, S J Logistics (India) Ltd will issue 38,40,000 shares (38.40 lakh shares), which at the upper IPO band price of ₹125 per share aggregates to a fresh IPO fund raising of ₹48.00 crore. In the absence of any 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 also comprise of 38.40 lakh shares, which at the upper price band of ₹125 per share will aggregate to ₹48.00 crore. As in the case of any SME IPO,  S J Logistics (India) IPO also has a market making portion with a market maker inventory allocation of 1,93,000 shares. The market maker for the issue is Hem Finlease Private Ltd and they will provide two-way quotes to ensure liquidity on the counter and low basis costs post listing. The promoter holding in the company currently stands at 67.55%, which will dilute post the IPO to 49.64%. S J Logistics (India) Ltd plans to use the fresh funds for repayment / prepayment of existing high cost loans, and for funding its working capital gaps. Hem Securities Ltd will be the lead manager to the issue, and Maashitla Securities Private Ltd will be the registrar to the issue. 

Final subscription status of S J Logistics (India) Limited

Here is the subscription status of the S J Logistics (India) Limited as at close on 14th December 2023.

As can be seen from the above table, the overall IPO of S J Logistics (India) Limited got subscribed an impressive 316.26 times. The HNI / NII portion led the stakes with 489.45 times subscription, followed by the Retail portion at 356.33 times subscription. The QIB portion of the IPO also got a healthy subscription of 116.16 times. 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. The subscription has shown strong traction for the IPO across all the three categories of investors; QIB, 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 1,93,000 shares were allocated as market maker portion to Hem Finlease 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 S J Logistics (India) Limited, the anchor allocation of 10,92,000 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 47.45% of the issue size to 19.01% of the issue size. The anchor allocation bidding opened on December 11, 2023 and also closed on the same day. A total of 10,92,000 shares were allocated across 9 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹125 per share. 

The total anchor allocation value was worth ₹13.65 crore. The top 5 anchor allottees included India Ahead Venture Fund (14.65%), India Max Investment Fund (14.65%), Chhattisgarh Investments (14.65%), and Rajasthan Global Securities (14.65%). These 4 anchor investors accounted for 58.60% of the anchor allocation. Out of the anchor shares allocated to investors on December 11, 2023, a lock in of 30 days will be applicable for 50% of the shares (up to January 29, 2024) and a lock-in of 90 days will be applicable for the remaining shares (up to April 22, 2024). The allocation of market maker inventory of 5.03% is outside the anchor portion.

How subscription built up for the IPO of S J Logistics (India) Limited

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 S J Logistics (India) Limited. The IPO was kept open for 3 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for S J Logistics (India) Limited.
    • The HNI / NII portion got the best subscription in the S J Logistics (India) Limited IPO at 489.45 times and it got 22.06 times subscribed on the first day of the IPO itself.

    • The Retail portion was behind the HNI / NII portion in terms of subscription at 356.33 terms overall and it got 37.34 times subscribed at the end of the first day.

    • The QIB portion was third in the pecking order in terms of subscription at 116.16 times overall and it got 4.08 times subscribed at the end of the first day.

    • While the QIB, retail and HNI / NII portion getting fully subscribed on the first day of the IPO itself, even the overall subscription was filled up on the first day. The overall IPO which saw subscription of 316.26 times also got fully subscribed at 24.56 times at the close of the first day of the IPO 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 49.63X to 489.45X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 101.79X to 356.33X on the last day of the IPO.

    • The last day traction story was true for QIBs and the overall IPO also. The QIB portion saw the total subscription ratio moving from 4.71X to 116.16X on the last day of the IPO. Finally, regarding the overall IPO subscription ratio, it also moved from 62.87X to 316.26X on the last day of the IPO.

With the IPO closed for subscription at the end of December 14th, 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 15th December 2023 while the refunds would be initiated on 18th December 2023. The shares of S J Logistics (India) Limited (ISIN - INE0F3301020) would be credited to the demat accounts of eligible shareholders by the close of 18th December 2023 while the stock of S J Logistics (India) Limited is expected to be listed on 19th December 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.