Sati Poly Plast IPO Subscription Status

Sati Poly Plast IPO - Day-1 Subscription at 21.58 times

As of 5.17 pm on 11th July 2024, out of the 8.86 lakh shares on offer in the IPO (excluding the market maker portion and the anchor allocation done), Sati Poly Plast saw bids for 191.23 lakh shares. This implies an overall subscription of 21.58X at a macro level at the close of Day-1 of the IPO. The granular break-up of subscriptions as of the close of Day-1 of the Sati Poly Plast IPO was as under:

The subscriptions were led by the retail investors followed by the HNI / NII investors and then by the QIB investors in that order. The QIB quota and the NII / HNI will typically gather most of the momentum on the last day, and that would be the case in this issue also in the case of the HNI / NII bids and the QIB bids. The NII bids pick up momentum on the last day since that is when the bulk HNI funding bids, corporate bids and the large HNI bids come in. Even the institutional bids come in on the last day in the first half. Here are the details of the category-wise subscription. The overall subscription ratio calculation excludes anchor portion and also the market making portion in the IPO.

Data Source: NSE

The IPO is open up to July 15th, 2024, at which point we will know the final subscription status of the IPO. As of today, the status is only updated as of the end of Day-1 of the IPO. The QIB and the HNI / NII categories see the best momentum coming only on the last and final day of the IPO, while the retail investors predominate on the first two days of the IPO. The market maker portion and anchor quota are excluded for the purpose of calculating the number of times subscription to get a realistic picture of the IPO subscription story.

Sati Poly Plast IPO – Share Allocation Across Categories

The table below captures the break-up of the overall share allocation to QIBs, retail investors and to the HNI / NII investors. The anchor allotment is carved out of the QIB quota and the QIB quota is reduced accordingly. The market maker allocation is the inventory that will be used by the market maker to provide liquidity in the counter post listing, to keep the bid-ask spreads low and reduce the risks of trading in the stock. The company has appointed Spread Securities Ltd as the market maker and assigned a market making inventory of 70,000 shares to them. The market maker will use this inventory to offer buy and sell quotes to keep the counter liquid and reduce the basis risk on the stock post listing.

Data Source: Company RHP

The anchor portion was carved out of the QIB portion, as a result of which the QIB quota available in the IPO was reduced from 47.34% to 18.95%. The stock will list on the stock exchanges on the third working day after the closure of the IPO.

About Sati Poly Plast IPO

The stock of the company has a face value of ₹10 per share and it is a book built issue. The book building price band for the IPO has been set in the range of ₹123 to ₹130 per share. The final price discovery will happen in the above price band only. The IPO of Sati Poly Plast has only a fresh issue component and no offer for sale (OFS) portion. While the fresh issue portion is EPS dilutive and equity dilutive, the OFS is just a transfer of ownership and  hence is not EPS or equity dilutive. As part of the fresh issue portion of the IPO, Sati Poly Plast will issue a total of 13,35,000 shares (13.35 lakh shares), which at the upper band IPO price of ₹130 per share aggregates to fresh fund raising of ₹17.36 crore. Since there is no offer for sale, the fresh issue will also double up as the overall size of the IPO. Therefore, the overall IPO size will also comprise of the issue of 13,35,000 shares (13.35 lakh shares) which at the upper band IPO price of ₹130 per share aggregates to overall IPO size of ₹17.36 crore.

Like every SME IPO, this issue also has a market making portion. The company has set aside a total of 70,000 shares as quota for market inventory. Spread X Securities Private Ltd has already been appointed as the market makers to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs. The company has been promoted by Balmukund Jhunjhunwala, Anita Jhunjhunwala, Aditya Jhunjhunwala, Keshav Jhunjhunwala and M/S Balmukund Jhunjhunwala HUF. The promoter holding in the company currently stands at 86.30%. However, post the fresh issue of shares, promoter equity holding share will get diluted to 63.00%. The fresh issue funds will be used by the company for its short term and long term working capital requirements in the business. A small part of the IPO proceeds has also be set aside for working capital needs. Beeline Capital Advisors Private Ltd will be the lead manager to the issue, and Link Intime India Private Ltd will be the registrar to the issue. The market maker for the issue is Spread X Securities Private Ltd. The IPO of Sati Poly Plast will be listed on the SME IPO segment of the NSE.

Next Steps in the Sati Poly Plast IPO process

The issue opened for subscription on 12th July 2024 and closes for subscription on 16th July 2024 (both days inclusive). The basis of allotment will be finalized on 18th July 2024 and the refunds will be initiated on 19th July 2024. In addition, the demat credits are expected to also happen on 19th July 2024 and the stock will list on 22nd July 2024 on the NSE SME IPO segment. The credits to the demat account to the extent of shares allotted will happen by the close of 19th July 2024 under ISIN (INE0RPM01017).