Slone Infosystems IPO Oversubscribed 667.81 Times

About Slone Infosystems IPO

The stock of Slone Infosystems IPO has a face value of ₹10 per share and it is a fixed price issue. The price for the fixed price issue is set at ₹79 per share. The IPO of Slone Infosystems Ltd has only a fresh issue component and no offer for sale (OFS) portion. As part of the fresh issue portion of the IPO, Slone Infosystems Ltd will issue a total of 14,00,000 shares (14.00 lakh shares), which at the fixed IPO price of ₹79 per share aggregates to fresh fund raising of ₹11.06 crore. Since there is no offer for sale (OFS) portion, the fresh issue size will also double up as the overall IPO size. Therefore, the overall IPO size will also comprise of the issue of 14,00,000 shares (14.00 lakh shares) which at the fixed IPO price of ₹79 per share will aggregate to overall IPO size of ₹11.06 crore.

Like any SME IPO, the issue of Slone Infosystems IPO also has a market making portion with a market maker inventory allocation of 70,400 shares. Aftertrade Share Broking Private Ltd will be the market maker to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs. The promoters of the company currently hold 99.43% stake in Slone Infosystems Ltd, which will get diluted to 73.01% post the IPO. The IPO funds raised will be used for purchase of laptops, desktops, SSD and RAM as well as for repayment / prepayment of high cost loans. Jawa Capital Services Private Ltd is the lead manager to the issue, and KFIN Technologies Ltd is the registrar to the issue.

Read more about Slone Infosystems IPO

Final subscription status of Slone Infosystems IPO

Here is subscription status of Slone Infosystems IPO at close on 07th May 2024.

As can be seen from the above table, the overall IPO of Slone Infosystems Ltd got subscribed an impressive 667.81 times. The HNI / NII portion led the stakes with 756.88 times subscription, followed by the Retail portion at 540.80 times subscription. There was no dedicated QIB allocation in this IPO. That is an extremely robust response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past. Also, in the current volatile market conditions, it does come across as an outstanding performance. The subscription saw very strong traction for the IPO across both the categories of investors; 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 70,400 shares were allocated as market maker portion to Aftertrade Share 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.

In the above IPO of Slone Infosystems Ltd, there is no dedicated QIB allocation in the IPO. The anchor allocation to the anchor investors is normally carved out of this QIB allocation and hence the company has not done any anchor allocation in the IPO. Normally, the anchor is done to institutional investors, which gives confidence and assurance to the retail shareholders about the institutional interest in the stock The anchor allocation is normally adjusted and deducted from the QIB quota and only the net number of shares is available for public issue under the QIB portion.

However, in this case, there is neither any QIB quota, nor any anchor allocation to investors ahead of the IPO. Normally, the anchor portion bidding is done on the day before the IPO opens and such anchor investments are subjected to lock in at two levels. Half the anchor allocation is locked in for 30 days while the balance anchor allocation shares are locked in for a period of 90 days. The allocation of market maker inventory of 5.03% is outside the anchor portion. The market making portion is more towards ensuring liquidity post listing and ensuring low basis spreads on the stock.

How subscription built up for the Slone Infosystems IPO?

The oversubscription of the IPO was dominated by the HNI / NII investors followed by the Retail Investor category in that order. The table below captures the day-wise progression of the subscription status of Slone Infosystems 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 Slone Infosystems Ltd.

• The HNI / NII portion got the best subscription in the Slone Infosystems Ltd IPO at 756.88 times and it got 7.15 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 540.80 times overall and it got 34.09 times subscribed at the end of the first day.
   
• Since the retail portion and the HNI / NII portion got fully subscribed on the first day of the IPO itself, it was only obvious that the overall IPO also got fully subscribed on the first day  of the IPO itself. The overall IPO, which saw subscription of 667.81 times at close, got fully subscribed at 20.68 times at the close of the first day.
   
• The 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 27.71X to 756.88X on the third and final day of the IPO.
   
• Like the HNI / NII portion, even the Retail portion saw outstanding traction on the last day of the IPO. In fact, the retail subscription ratio moved from 128.31X to 540.80X on the last day of the IPO.
   
• What about the Overall IPO. The last day story was true for the overall IPO also. On the third and final day of the IPO, the subscription ratio overall moved from 78.14X to 667.81X on the last day of the IPO.

Next steps in the IPO process

The issue opened for subscription on 03rd May 2024 and closed for subscription on 07th April 2024 (both days inclusive). The basis of allotment will be finalized on 08th May 2024 and the refunds will be initiated on 09th May 2024. In addition, the demat credits are also expected to happen on 09th May 2024 and the stock is scheduled to list on 10th May 2024 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The demat credits to the demat account to the extent of allotment will happen by the close of 09th May 2024 under ISIN Number (INE0SMA01017).