Metro Brands IPO - Subscription Day 3

5paisa Research Team 5paisa Research Team 14th December 2021 - 07:53 pm

The Rs.1,367.51 crore IPO of Metro Brands Ltd, consisting of a fresh issue of Rs.295 crore and an offer for sale (OFS) of Rs.1,072.51 crore, saw tepid response on Day-1 and Day-2 of the IPO. As per the combined bid details put out by the BSE at the end of Day-3, Metro Brands Ltd IPO was subscribed just 3.64X overall, with bulk of the demand coming only from the QIB segment. The issue has closed for subscription on Tuesday, 14th December.

As of close of 14th December, out of the 191.45 lakh shares on offer in the IPO, Metro Brands Ltd saw bids for 696.12 lakh shares. This implies an overall subscription of 3.64 times. The granular break-up of subscriptions was dominated by the QIB investors followed by the HNI response while retail was rather subdued.

Normally, it is only on the last day of bidding, the NII bids and the QIB bids build substantial momentum. First two days response may not be too relevant. Metro Brands is backed by one of India’s foremost stock market investors, Rakesh Jhunjhunwala.

Metro Brands Ltd IPO Subscription Day 3

Category	Subscription Status
Qualified Institutional Buyers (QIB)	8.49 Times
Non Institutional Investors (NII)	3.02 Times
Retail Individuals	1.13 Times
Employees	N.A.
Overall	3.64 times

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 09th December, Metro Brands Ltd did an anchor placement of 82,05,030 shares at the upper end of the price band of Rs.500 to 28 anchor investors raising Rs.410.25 crore, representing 30% of the total issue size.

The list of QIB anchors included a number of marquee international names like Goldman Sachs, Abu Dhabi Investment Authority, University of Notre Dame, Indus Fund, GMO Emerging Markets, Valiant India, Janchor etc. Domestic investors in the anchor placement included SBI Life Insurance, HDFC Life Insurance, ICICI Pru MF, Kotak MF, Sundaram MF, UTI Mutual Fund and Tata Mutual Fund.

The QIB portion (net of anchor allocation as explained above) has a quota of 54.70 lakh shares of which it has got bids for 464.45 lakh shares at the close of Day-3, implying 8.49 times subscription for QIBs at the end of Day-3. QIB bids typically got bunched on the last day but the strong institutional response in the anchor placement had shown that there is institutional appetite for the Metro Brands IPO.

HNI / NII Portion

The HNI portion got subscribed 3.02 times (getting applications for 123.85 lakh shares against the quota of 41.03 lakh shares). This is a relatively tepid response for Day-3 but this segment saw the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, came in on the last day of the IPO only.

Retail Individuals

The retail portion was subscribed a relatively tepid 1.13 times at the close of Day-3, showing limited retail appetite in this particular case. It must be noted that retail allocation is 35% in this IPO.

For retail investors; out of the 95.73 lakh shares on offer, valid bids were received for 107.83 lakh shares, which included bids for 85.73 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.485-Rs.500) and has closed for subscription on 14th December 2021.