Transteel Seating Technologies IPO Subscribed 49.21 times

About the Transteel Seating Technologies Ltd

Transteel Seating Technologies IPO opened for subscription on 30th October 2023 and closed for subscription on 01st November 2023. The stock of the company has a face value of ₹10 per share and it is a book built IPO with the indicative price band of ₹67 to ₹70 per share. The IPO of Transteel Seating Technologies Ltd has a fresh issue component as well as an offer for sale (OFS) component. As part of the fresh portion of the IPO, Transteel Seating Technologies Ltd will issue 67,84,000 shares (67.84 lakhs), which at the upper band IPO price of ₹70 per share aggregates to a fresh fund raising of ₹47.49 crore. The offer for sale (OFS) entails the sale of 3,56,000 shares (3.56 lakhs), which at the upper band IPO price of ₹70 per share aggregates to a total OFS size of ₹2.49 crore. The entire 3.56 lakh shares are being offered by promoter shareholder, Nasreen Shiraz. The overall size of the IPO of Transteel Seating Technologies Ltd will, therefore, entail the issue and sale of 71,40,000 shares (71.40 lakhs), which at the upper band IPO price of ₹70 per share aggregates to ₹49.98 crore in total.

The minimum lot size for the IPO investment will be 2,000 shares. Thus, retail investors can invest a minimum of ₹140,000 (2,000 x ₹70 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 ₹280,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The IPO of Transteel Seating Technologies has a market maker allocation of 7,14,000 shares to the market maker, Gretex Share Broking Ltd and they will provide two-way quotes to ensure liquidity on the counter and low basis costs post listing. The promoter stake post the IPO will get diluted from 83.75% to 53.83%. The company will use the fresh issue funds for purchase of manufacturing equipment, repayment / prepayment of loans, and working capital needs. Gretex Corporate Services Ltd and Pantomath Capital Advisors Private Ltd will be the lead managers to the issue and Bigshare Services Private Ltd will be the registrar to the issue.

Final subscription status of Transteel Seating Technologies IPO

Here is the subscription status of the Transteel Seating Technologies IPO as at close on 01st November 2023.

As can be seen from the above table, the overall IPO of Transteel Seating Technologies Ltd got subscribed an impressive 49.21 times. The HNI / NII portion led the stakes with 122.88 times subscription, followed by the Retail portion at 39.82 times subscription. Even the QIB portion got subscribed 12.15 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 7,14,000 shares were allocated as market maker portion to Gretex Share Broking 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 Transteel Seating Technologies Ltd, the anchor allocation of 18.60 lakh shares comprising 26.05% of the total IPO size was done a day ahead of the IOP opening on October 27, 2023. The entire allocation was done at the upper end of the price band of ₹70 per share (which comprises of the face value of ₹10 per share and a premium of ₹60 per share). The entire anchor allocation was spread across 5 anchor investors with one of the anchor investors (NAV Capital Emerging Star Fund) getting 37.07% of the anchor allocation portion. This is outside of the market maker allocation of 10%. 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 Transteel Seating Technologies 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 Transteel Seating Technologies 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 Transteel Seating Technologies Ltd.

• The HNI / NII portion got the best subscription in the Transteel Seating Technologies Ltd IPO at 122.88 times and it got 1.76 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 39.82 times overall and it got 2.74 times subscribed at the end of the first day.
   
• While the retail and HNI / NII portion got fully subscribed on the first day of the IPO itself, the QIB portion got subscribed only on the last day of the IPO and also got subscribed at 12.15 times at the close of the IPO. However, the overall IPO got fully subscribed on the first day 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 2.91X to 122.88X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 7.99X to 39.82X 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 0.32X to 12.18X. Similarly, even the overall IPO saw smart traction on the last day with the subscription ratio for the overall IPO moving from 4.65X to 49.21X on the last day.

With the IPO closed for subscription at the end of 01st November, 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 Transteel Seating Technologies Ltd (ISIN - INE0NVI01020) would be credited to the demat accounts of eligible shareholders by the close of 08th November 2023 while the stock of Transteel Seating Technologies Ltd is expected to be listed on 09th November 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.