Vedant Fashions IPO - Subscription Day 3

5paisa Research Team 5paisa Research Team 8th February 2022 - 06:56 pm

The Rs.3,149.19 crore IPO of Vedant Fashions Ltd, consisting entirely of an offer for sale of shares of Rs.3,149.19 crore, saw weak response on Day-1 and Day-2 of the IPO. However, QIBs came and managed to sail through the issue on Tuesday, 08-February.

As per the combined bid details put out by the BSE at the end of Day-3, Vedant Fashions IPO was subscribed just 2.57 time overall, with the retail portion getting undersubscribed, the NII portion getting just about subscribed and the QIB portion getting oversubscribed. The issue has closed for subscription on Tuesday, 08th February 2022.

As of close of 08th February 2022, out of the 254.55 lakh shares on offer in the IPO, Vedant Fashions Ltd saw bids for just 653.73 lakh shares. This implies an overall subscription of 2.57 times. The granular break-up of subscriptions saw the retail portion getting largely undersubscribed, the NII portion getting just about subscribed and the QIB portion getting oversubscribed in a robust manner.

Normally, it is only on the last day of bidding, the NII bids and the QIB bids build up substantial momentum. However, the issue of Vedant Fashions almost entirely sailed through due to the strong QIB response. That is not surprising considering the strong anchor response we saw a day ahead of the IPO.

Vedant Fashions IPO Subscription Day 3

Category	Subscription Status
Qualified Institutional Buyers (QIB)	7.47 Times
Non Institutional Investors (NII)	1.09 Times
Retail Individuals	0.39 Times
Employee Reservation	N.A.
Shareholder Reservation	N.A.
Overall	2.57 times

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 03rd February, Vedant Fashions Ltd did an anchor placement of 1,09,09,450 shares at the upper end of the price band of Rs.866 to a total of 75 anchor investors. Vedant raised Rs.944.76 crore via anchor issue representing 30% of the total issue size. Out of the 75 anchor investors, 44 were domestic mutual fund schemes while the others were FPIs and institutional investors.

Check - Vedant Fashions IPO - Anchor Investments

The anchor list of QIB anchors included a number of marquee international names like Government of Singapore, MAS, Fidelity, Nomura, Volrado Fund, Morgan Stanley, Abu Dhabi Investment Authority, Wellington, Ashoka Fund, Pioneer Fund, Carmignac etc. It also included big domestic names like SBI MF, ICICI Pru, Axis MF, HDFC Life etc.

The QIB portion (net of anchor allocation as explained above) has a quota of 72.73 lakh shares of which it has got bids for 544.93 lakh shares at the close of Day-3, implying 7.49 times subscription for QIBs at the close of Day-3. The bulk of the QIB bids typically got bunched on the last day but the solid response in the anchor placement had indicated that there was strong appetite from the domestic and international institutions for the IPO.

HNI / NII Portion

The HNI portion got subscribed 1.07 times (getting applications for 58.55 lakh shares against the quota of 54.55 lakh shares). This is a fairly tepid response at the close of Day-3 with most of the response coming only from individual HNIs. However, this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO only, but this time around both appeared to be fairly limited.

Retail Individuals

The retail portion was the disappointment at 0.39 times at the close of Day-3, while normally retail has been the driver of IPO numbers. One argument is that the high price may have been a deterrent for retail. It must be noted that retail allocation was 35% in this IPO.

Retail portion was subscribed 0.39 times. For retail investors; out of the 127.28 lakh shares on offer, valid bids were received for 50.25 lakh shares, which included bids for 37.92 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.824-Rs.866) and has closed for subscription on 08th February 2022.

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