Arvind and Company Shipping Agencies IPO Subscribed 9.94 times

About the Arvind and Company Shipping Agencies IPO

Arvind and Company Shipping Agencies IPO opened for subscription on 12th October 2023 and closed for subscription on 16th October 2023. The company had a face value of ₹10 per share and, being a fixed price IPO, its issue price had already been fixed at ₹45 per share. The IPO of Arvind and Company Shipping Agencies Ltd has only a fresh issue component with no book built portion. As part of the fresh issue portion of the IPO, Arvind and Company Shipping Agencies Ltd will issue 32,76,000 shares (32.76 lakhs), which at the fixed IPO price of ₹45 per share aggregates to a fresh issue of ₹14.74 crore. Since there is no offer for sale portion, the fresh issue size will also be the total size of the IPO. The overall IPO will also comprise of the issue of 32.76 lakh shares, which at the fixed IPO price of ₹45 per share will aggregate to total issue size of ₹14.74 crore.

The minimum lot size for the IPO investment will be 3,000 shares. Retail investors can invest a minimum of ₹135,000 (3,000 x ₹45 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 6,000 shares and having a minimum lot value of ₹270,000. There is no upper limit QIBs and HNI / NII investors. The IPO of Arvind and Company Shipping Agencies Ltd has a market making allocation of 1,68,000 shares with Spread X Securities Ltd as the market maker to provide liquidity on the counter at low basis risk. Post the issue, the promoters will see their stake diluted from 100.00% to 73.01%. The company will use the fresh issue proceeds to fund its upcoming capex expenditure and for general corporate purposes. Beeline Capital Advisors Private Ltd will be the lead manager to the issue and Skyline Financial Services Private Ltd will be the issue registrar.

Final subscription status of Arvind and Company Shipping Agencies IPO

Here is the subscription status of the Arvind and Company Shipping Agencies IPO as at close on 16th October 2023.

As can be seen from the above table, the overall IPO of Arvind and Company Shipping Agencies Ltd got subscribed a whopping 385.03 times. The HNI / NII portion led the stakes with 436.05 times subscription, followed by the Retail portion at 321.97 times. That is a very robust and strong response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past.

Allocation quota for various categories

The issue was open for retail investors, and for the non-retail investors, which predominantly comprises of the NII / HNI investors. There was a broad quota designed for each of the segments viz. the retail and the HNI NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 1,68,000 shares were allocated as market maker portion to Spread X Securities Ltd, which will act as a market maker 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.

As can be seen, from the above table, the IPO did not have any QIB allocation in the IPO and there was also no anchor portion. Normally, anchor portion shares are reduced from the QIB quota in the IPO. However, the IPO had allocated a total of 1,68,000 shares for the market maker towards market making inventory. The market maker allocation was 5.13% of the total IPO size.

How subscription built up for the Arvind and Company Shipping Agencies IPO

The oversubscription of the IPO was dominated by the HNI / NII category followed by the Retail. There was no QIB allocation in this issue. The table below captures the day-wise progression of the subscription status of Arvind and Company Shipping Agencies Ltd IPO. The IPO had opened on October 12, 2023 and closed on Monday, October 16, 2023.

It is clear from the above table that both the retail category and the HNI / NII category got fully subscribed on the first day of the IPO itself. In fact, they not only got full subscribed, but also got substantially oversubscribed on the first day itself. Obviously, the overall IPO also was subscribed nearly 10 times on the first day of the IPO itself. In short, the retail portion, the HNI / NII portion and the overall IPO got fully subscribed on the first day of the IPO itself. However, both the categories of investors in the IPO saw bunching of flows on the last day of the IPO. The overall IPO saw bulk of the subscriptions concentrated on the third and last day of the IPO.

All the 3 categories of investors viz., HNIs / NIIs, retail and QIB categories saw good traction and build-up of interest on the last day of the IPO.  Post the IPO listing, the market maker will offer two way quotes on the stock, using the inventory of shares, and ensure that investors do not have to worry about liquidity and basis risk. The basis of allotment will be finalized on 19th October 2023 while the stock is expected to be listed on 25th October 2023. The listing will happen on the NSE SME segment for small companies, which is in contrast to the mainboard IPO space.