Sah Polymers IPO subscribed 17.46 times at close

Sah Polymers IPO, worth Rs. 66.30 crore consisted entirely of a fresh offer of shares for the full amount. There was no offer for sale (OFS) component in the IPO. That means; fresh funds will come into the company and it would also be EPS dilutive. Sah Polymers 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, Sah Polymers Ltd IPO was subscribed at 17.46X overall, with best demand coming from the retail segment, followed by the HNI / NII segment and finally the QIB in that order. In fact, retail subscription has bene robust considering the small size of the issue. The HNI portion did do extremely well and there was a surge of funding applications coming on the last day of the IPO.

As of close of 04th January 2023, out of the 56.10 lakh shares on offer in the IPO, Sah Polymers Ltd saw bids for 979.45 lakh shares. This implies an overall subscription of 17.46X. The granular break-up of subscriptions was in favour of the retail investors followed by the HNI / NII investors while the QIB portion got the lowest relative 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 HNI / NII bids. However, the QIB bids did not show too much of traction on the last day of subscription.

Sah Polymers Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 29th December 2022, Sah Polymers Ltd did an anchor placement of 45,90,000 shares at the upper end of the price band of Rs. 65 to 3 anchor investors raising Rs. 29.84 crore. The list of QIB investors included just 3 names viz. Leading Light Fund VCC (The Triumph Fund), Saint Capital Fund and Maven Capital Fund and these 3 investors accounted for the entire 100% of the anchor book absorption.

The QIB portion (net of anchor allocation as explained above) had a quota of 30.60 lakh shares of which it has got bids for 73.50 lakh shares at the close of Day-3, implying a subscription ratio of 2.40X 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 Sah Polymers Ltd IPO subscription overall, the actual demand did not turn out to be all that robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 32.69X (getting applications for 500.15 lakh shares against the quota of 15.30 lakh shares). That is a rather steady 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 substantially visible as the overall HNI / NII portion built up substantial heft on the last day. However, the HNI portion did manage to get a strong oversubscription.

Now the NII/HNI portion is reported in two parts viz. bids below Rs10 lakhs (S-HNI) and bids above Rs. 10 lakhs (B-HNI). The bids above the Rs. 10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs. 10 lakh bid category got subscribed 33.94X while the below Rs. 10 lakh bid category (S-HNIs) got subscribed 30.20X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was subscribed 39.78X at the close of Day-3, showing steady retail appetite. It must be noted that retail allocation is only 10% in this IPO. For retail investors; out of the 10.20 lakh shares on offer, valid bids were received for only 405.80 lakh shares, which included bids for 356.80 lakh shares at the cut-off price. The IPO is priced in the band of (Rs. 61-Rs. 65) and has closed for subscription as of the close of Wednesday, 04th January 2023.