Sharp Chucks and Machines IPO Subscribed 54.20 times

About the Sharp Chucks And Machines IPO

Sharp Chucks And Machines IPO opened for subscription on 29th September 2023 and closed for subscription on 05th October 2023. The IPO was open for 4 days in all. The company stock has a face value of ₹10 per share and it is a fixed price issue with the PO price fixed at ₹58 per share. The IPO of Sharp Chucks And Machines Ltd has a fresh issue component and an offer for sale (OFS). As part of the fresh issue portion of the IPO, Sharp Chucks And Machines Ltd will issue 9,75,484 shares (9.75 lakh shares approximately ). At the fixed IPO price of ₹58 per share, the fresh issue size will be ₹5.66 crore. The offer or sale of Sharp Chucks And Machines Ltd will entail the sale of 19,28,516 shares (19.29 lakh shares approximately ). At the fixed IPO price of ₹58 per share, the OFS portion aggregates to ₹11.19 crore. Thus, the total IPO size of Sharp Chucks And Machines Ltd will entail the issue and sale of 29,04,000 shares (29.04 lakh shares). At the fixed IPO price of ₹58 per share, the overall IPO issue size aggregates to ₹16.84 crore.

The minimum lot size for the IPO investment will be 2,000 shares. Thus, retail investors can invest a minimum of ₹1,16,000 (2,000 x ₹58 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 ₹2,32,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. Post the IPO, the promoter stake will get diluted from 80.28% to 73.00%. The company will use the IPO funds for incremental working capital needs and for general corporate purposes. Fedex Securities Private Ltd will be the lead manager to the issue and Skyline Financial Services Private Ltd will be the registrar to the issue. The market maker for the issue is Nikunj Stock Brokers  Ltd.

Final subscription status of Sharp Chucks And Machines IPO

Here is the subscription status of the Sharp Chucks And Machines IPO as at close on 05th October 2023.

As can be seen from the above table, the overall IPO of Sharp Chucks And Machines Ltd got subscribed a healthy 54.20 times. The Retail portion led the stakes with 63.69 times subscription, followed by the HNI / NII portion at 38.76 times. That is a very strong and healthy response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past.

Allocation quota for various categories

The issue was open for retail investors, and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the retail and the HNI / NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 1,48,000 shares were allocated as market maker portion to Nikunj Stock Brokers Ltd, which will act as a market maker 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.

As can be seen, from the above table, the company has allocated 5.1% of the total issue size to the market makers to provide buy-sell liquidity on the counter post listing. The net offer (net of market maker quota) is distributed equally between the retail investors and the HNI / NII investors. There is no QIB portion allocation in the IPO and hence there is also no anchor allocation to the anchor investors.

How subscription built up for the Sharp Chucks And Machines IPO

The oversubscription of the IPO was dominated by the HNI / NII category followed by the Retail and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Sharp Chucks And Machines Ltd IPO.

It is clear from the above table that while the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion got fully subscribed only on the second day of the IPO. However, the overall IPO got just about fully subscribed on the first day of the IPO. The IPO was open for a period of 4 days due to a slew of holidays in between. Overall, the IPO got just about fully subscribed at the end of the first day of the IPO. However, all the 3 categories saw bunching of flows on the last day of the IPO. The overall IPO was fully subscribed on the first day of the IPO although most of the traction came on the last day.

All the 3 categories of investors viz., HNIs / NIIs, retail and QIB categories saw good traction and build-up of interest on the last day of the IPO.  Post the IPO listing, the market maker will offer two way quotes on the stock, using the inventory of shares, and ensure that investors do not have to worry about liquidity and basis risk. The basis of allotment will be finalized on 09th October 2023 while the stock is expected to be listed on 12th October 2023. The listing will happen on the NSE SME segment for small companies, which is in contrast to the mainboard IPO space.