Tunwal E-Motors IPO Subscription Status

Tunwal E-Motors IPO Subscription Status on Day-1 at 1.95 Times

As of 5.05 pm on 15th July 2024, out of the 186.20 lakh shares on offer in the IPO (excluding the market maker portion), Tunwal E-Motors saw bids for 362.24 lakh shares. This implies an overall subscription of 1.95X at a macro level. The granular break-up of subscriptions as of the close of the first day of the Tunwal E-Motors IPO was as follows:

The subscriptions were led by the retail investors followed by the HNI / NII investors in that order. Since there is no QIB quota in this IPO, 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. 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. Here are the details of the category-wise subscription. The overall subscription excludes anchor portion.

Data Source: NSE

The IPO is open up to July 18, 2024, at which point we will know the final subscription status of the IPO. As of today, the above table is representative of the subscription status of the company at the close of Day-1 of the IPO.

Tunwal E-Motors IPO - Share Allocation Across Categories

The table below captures the break-up of the overall share allocation to retail investors and to the HNI / NII investors. The anchor allotment is carved out of the QIB quota (if any) 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 Nikunj Stock Brokers Ltd and Giriraj Stock Broking Private Ltd as the joint market makers for the issue and assigned a market making inventory of 9,80,000 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

In the above IPO of Tunwal E-Motors, 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 5.00% is outside the anchor portion. The market making portion is more towards ensuring liquidity post listing and ensuring low basis spreads on the stock.

About Tunwal E-Motors IPO

The stock of the company has a face value of ₹2 per share and it is a fixed price issue. The IPO price for the fixed price issue of Tunwal E-Motors  has been set at ₹59 per share. Being a fixed price IPO, there is no question of price discovery. The IPO of Tunwal E-Motors has a fresh issue component and an 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, Tunwal E-Motors will issue a total of 1,38,50,000 shares (138.50 lakh shares), which at the fixed IPO price of ₹59 per share aggregates to fresh fund raising of ₹81.72 crore. The offer for sale portion of the IPO of Tunwal E-Motors will entail the sale / offer of 57,50,000 shares (57.50 lakh shares), which at the fixed IPO price of ₹59 per share aggregates to an OFS size of ₹33.93 crore. The entire 57.50  lakh shares in the OFS are being offered by the promoter, Jhumarlal Pannaram Tunwal. Therefore, the overall IPO size will also comprise of the fresh issue and OFS of 1,96,00,000 shares (196.00 lakh shares) which at the fixed IPO price of ₹59 per share aggregates to overall IPO size of ₹115.64 crore. 

Read more about Tunwal E-Motors IPO

Like every SME IPO, this issue also has a market making portion. The company has set aside a total of 9,80,000 shares as quota for market inventory. Nikunj Stock Brokers Ltd and Giriraj Stock Broking Private Ltd have already been appointed as the joint 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 Jhumarlal Pannaram Tunwal. The promoter holding in the company currently stands at 97.04%. However, post the fresh issue of shares, promoter equity holding share will get diluted to 62.34%. The fresh issue funds will be used by the company for inorganic growth via M&A, research & development, and for funding working capital needs of the company. A small part of the IPO proceeds has also be set aside for general corporate needs. Horizon Financial Private will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue. The joint market makers for the issue are Nikunj Stock Brokers Ltd and Giriraj Stock Broking Private Ltd. The IPO of Tunwal E-Motors will be listed on the SME IPO segment of the NSE.

Next Steps in the Tunwal E-Motors IPO Process

The issue opened for subscription on 15th July 2024 and closes for subscription on 18th July 2024 (both days inclusive). The basis of allotment will be finalized on 19th July 2024 and the refunds will be initiated on 22nd July 2024. In addition, the demat credits are expected to also happen on 22nd July 2024 and the stock will list on 23rd July 2024 on the NSE SME IPO segment. Tunwal E-Motors will test the appetite for aluminium packaging stocks in India. The credits to the demat account to the extent of shares allotted will happen by the close of 22nd July 2024 under ISIN (INE0OXV01027).