SAR Televenture IPO: Oversubscribed at a Remarkable 288.07x

About the SAR Televenture IPO

SAR Televenture IPO opened for subscription on 01st November 2023 and closed for subscription on 03rd November 2023. The stock of SAR Televenture Ltd had a face value of ₹2 per share and being a book building issue, the IPO price band has been set in the range of ₹52 to ₹55 per share. The IPO of SAR Televenture Ltd has only a fresh issue component with no book built portion. As part of the fresh portion of the IPO, SAR Televenture Ltd will issue a total of 45,00,000 shares (45 lakh shares), which at the upper IPO band price of ₹55 per share aggregates to a fresh issue fund raising of ₹24.75 crore. Since there is no 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 45.00 lakh shares, which at the upper price band of ₹55 per share will aggregate to ₹24.75 crore overall IPO size.

The minimum lot size for the IPO investment will be 2,000 shares. Thus, retail investors can invest a minimum of ₹110,000 (2,000 x ₹55 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 4,000 shares and having a minimum lot value of ₹220,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The IPO will have a SME IPO market making portion with a market maker inventory allocation of 2,30,000 shares. The market maker for the issue is R.K. Stock Holding Private Ltd and they will provide two-way quotes to ensure liquidity on the counter and low basis costs post listing. Post the IPO, the promoter stake in the company will get diluted from 87.8% to 61.46%.The company will use the fresh funds to install 5G/4G towers, repayment of secured borrowings, and funding working capital gaps. Pantomath Capital Advisors Private Ltd will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue.

Final subscription status of SAR Televenture IPO

Here is the subscription status of the SAR Televenture IPO as at close on 03rd November 2023.

As can be seen from the above table, the overall IPO of SAR Televenture Ltd got subscribed an impressive 288.07 times. The HNI / NII portion led the stakes with 715.76 times subscription, followed by the Retail portion at 222.06 times subscription. Even the QIB portion got subscribed an impressive 77.00 times overall. 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 categories of investors.

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, the QIB and the HNI / NII segments. A total of 2,30,000 shares were allocated as market maker portion to R.K. Stock Broking Private 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.

The anchor allotment is normally done a day ahead of the IPO opening. In the case of SAR Televenture Ltd, the anchor allocation of 12.78 lakh shares comprising 28.36% of the total IPO size was done a day ahead of the IOP opening on October 31, 2023. The entire allocation was done at the upper end of the price band of ₹55 per share (which comprises of the face value of ₹2 per share and a premium of ₹53 per share). The entire anchor allocation was spread across 5 anchor investors with two of the anchor investors getting more than 28% of the anchor allocation portion each. The market making portion of 5.06% is independent of the anchor allocation. The anchor portion is carved out of the QIB portion and so the QIB quota available to the public will be reduced by the anchor size. That has been reflected in the revised allocation in the table above.

How subscription built up for the SAR Televenture 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 SAR Televenture 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 SAR Televenture Ltd.

• The HNI / NII portion got the best subscription in the SAR Televenture Ltd IPO at 715.76 times and it got 6.02times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 222.06 terms overall and it got 14.17 times subscribed at the end of the first day.
   
• While the retail and HNI / NII portion getting fully subscribed on the first day of the IPO itself, it was only the QIB portion with lagged with just about 0.03 times subscription on the first day while the overall IPO also got fully subscribed at 8.40 times at the close of the first day of the IPO itself.
   
• The QIB, 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 33.02X to 715.76X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 51.34X to 222.06X 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, even the QIB portion saw the last day subscription jump from 7.44X to 77.00X. Similarly, even the overall IPO saw smart traction on the last day with the subscription ratio for the overall IPO moving from 34.95X to 288.07X on the last day.

With the IPO closed for subscription at the end of November 03rd, 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 06th November 2023 while the refunds would be initiated on 07th November 2023. The shares of SAR Televenture Ltd (ISIN - INE0PUC01020) would be credited to the demat accounts of eligible shareholders by the close of 07th November 2023 while the stock of SAR Televenture Ltd is expected to be listed on 08th November 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.