ABS Marine Services IPO Subscribed 145.80 Times

About the ABS Marine Services IPO

The stock of ABS Marine Services IPO has a face value of ₹10 per share and it is a book built issue. The price for the book building issue is set in the price band of ₹140 to ₹147 per share. Being a book built issue, the final price will be discovered within this band. The IPO of ABS Marine Services Ltd has only a fresh issue component and no offer for sale (OFS) portion. The fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership and  hence it is not EPS or equity dilutive. As part of the fresh issue portion of the IPO, ABS Marine Services Ltd will issue a total of 65,50,000 shares (65.50 lakh shares approximately), which at the upper band IPO price of ₹147 per share aggregates to fresh fund raising of ₹96.29 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 65,50,000 shares (65.50 lakh shares) which at the upper band IPO price of ₹147 per share will aggregate to overall IPO size of ₹96.29 crore.

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 4,10,000 shares. Giriraj Stock Broking Private Ltd and Commodity Mandi Private Ltd will be joint market makers to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs, post listing. The promoter holding in the company currently stands at 86.50%. However, post the fresh issue of shares in the IPO, the promoter equity holding share will get diluted to 63.42%. The fresh issue funds will be used by the company towards the acquisition of offshore vessels for expanding its business franchise and meet working capital needs. GYR Capital Advisors Private Ltd is the lead manager to the issue, and Purva Share Registry India Private Ltd will be the registrar to the issue. The market maker for the issue is Giriraj Stock Broking Private Ltd and Commodity Mandi Private Ltd. The IPO of ABS Marine Services Ltd will be listed on the SME IPO segment of the NSE.

Read more about ABS Marine Services IPO

Final subscription status of ABS Marine Services Ltd

Here is the subscription status of the ABS Marine Services IPO at the close of 15th May 2024.  In the table below, the anchor investment and market quota are given in italics. That is because, while they are also part of the issue, they are not used in the overall calculation of the oversubscription. The final data has been captured from the National Stock Exchange (NSE) data as at 19.00 hours on May 15, 2024.

Data Source: NSE

As can be seen from the above table, the overall IPO of ABS Marine Services Ltd got subscribed an impressive 145.80 times. The HNI / NII portion led the stakes with 271.70 times subscription, followed by the Retail portion at 112.63 times subscription. The QIB portion of the IPO also got a healthy subscription of 109.30 times. That is a very strong and robust 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 the three categories of investors; QIB, retail and HNI / NII 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, QIB and the HNI / NII segments. A total of 4,10,000 shares were allocated as market maker portion to Giriraj Stock Broking Private Ltd and Commodity Mandi Private Ltd, which will act as the 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.

Data Source: Company RHP

In the above IPO of ABS Marine Services Ltd, the anchor allocation of 18,41,000 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 46.86% of the issue size to 18.75% of the issue size. The anchor allocation bidding opened on May 09th, 2024 and also closed on the same day. A total of 18,41,000 shares were allocated across 9 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹147 per share (which includes face value of ₹10 per share and premium of ₹137 per share).

The total anchor allocation value was worth ₹27.06 crore. The 9 anchor investors who got allotted the full 100% of the anchor portion included a wide array of hedge funds and alternate investment funds (AIFs), apart from domestic bodies corporate that also participated in the anchor allocation of the IPO. Out of the anchor shares allocated to investors on May 09th, 2024, a lock in of 30 days will be applicable for 50% of the shares (up to June 15th, 2024) and a lock-in of 90 days will be applicable for the remaining shares (up to August 14th, 2024). The allocation of market maker inventory of 6.26% is outside the anchor portion.

How subscription built up for the IPO of ABS Marine Services Ltd?

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 ABS Marine Services Ltd. The IPO was kept open for 4 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for ABS Marine Services Ltd as of the close of the IPO on 15th May 2024.

• The HNI / NII portion got the best subscription in the ABS Marine Services Ltd IPO at 271.70 times and it got 1.69 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 112.63 times overall and it got 2.28 times subscribed at the end of the first day.
   
• The QIB portion was third in the pecking order in terms of subscription at 109.30 times overall and it got 1.27 times subscribed at the end of the first day.
   
• With the Retail portion, HNI / NII portion and the QIB portion getting fully subscribed on the first day of the IPO itself, the overall IPO also got fully subscribed on Day-1 itself.
   
• The overall IPO which saw subscription of 145.80 times got subscribed at 1.86 times at the close of the first day of the IPO. Let us now turn to how the last day traction on the IPO subscription played out across categories.
   
• Let us start with the HNI / NII portion. The HNI / NII portion saw the total subscription ratio moving from 18.38X to 271.70X on the last day of the IPO. That is a substantial amount of traction on the last day.
   
• Like the HNI / NII portion, even the retail portion saw very good traction on the last day of the IPO. On the final day of the IPO, the total subscription ratio for retail investors moved from 26.05X to 112.63X on the last day of the IPO.
   
• The strong last day traction was the case in the QIB investors also, which is natural as they see most of the flows on the last day. The QIB portion saw the total subscription ratio moving from 4.82X to 109.30X on the last day of the IPO.
   
• Finally, regarding the overall IPO subscription ratio, the move was obviously strongest on the last day of the 3-day IPO. The overall subscription moved from 18.34X to 145.80X on the last day of the IPO.

Overall, the IPO of ABS Marine Services Ltd saw above-median subscription in the SME IPO.

Next steps after the closure of the IPO

The issue opened for subscription on 10th May 2024 and closed for subscription on 15th May 2024 (both days inclusive). The basis of allotment will be finalized on 16th May 2024 and the refunds will be initiated on 17th May. In addition, the demat credits are also expected to happen on 17th May 2024 and the stock is scheduled to list on 21st 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 17th May 2024 under ISIN Number (INE0QRV01016).