Gandhar Oil Refinery India IPO subscribed 64.07 times!

Gandhar Oil Refinery India IPO opened on 22nd November 2023 and closed for subscription on 24th November 2023. The stock of Gandhar Oil Refinery India Ltd has a face value of ₹2 per share and the price band for the book building IPO has been set in the band of ₹160 to ₹169 per share. The final price will be discovered within this band. Gandhar Oil Refinery India IPO will be a combination of a fresh issue and an offer for sale (OFS). The fresh issue portion of Gandhar Oil Refinery India Ltd IPO comprises the issue of 1,78,69,822 shares (178.70 lakh shares approximately), which at the upper price band of ₹169 per share will translate into fresh issue size of ₹302 crore. The offer for sale (OFS) portion of the IPO of Gandhar Oil Refinery India Ltd comprises the sale of 1,17,56,910 shares (117.57 lakh shares), which at the upper price band of ₹169 per share will translate into an offer for sale (OFS) size of ₹198.69 crore.

The OFS selling will be by the promoter shareholders of the company as well as some of the early investor shareholder. Out of the offer for sale of 117.57 lakh shares in the OFS, the promoter shareholders will offer 67.50 lakh shares, while the balance shares will be offered by the investor shareholders. Thus, the overall IPO of Gandhar Oil Refinery India Ltd will comprise of the issue and sale of 2,96,26,732 shares (296.27 crore shares approximately), which at the upper price band of ₹169 per share will translate into total IPO issue size of ₹500.69 crore. The net proceeds from the IPO fresh issue portion will be utilized for investing in Texol by way of loan to refinance repayment to Bank of Baroda, capex for purchase of equipment, automotive oil capacity expansion, expansion of the oil and jelly facility at Taloja etc. The IPO will be lead managed by Nuvama Wealth Management and ICICI Securities Ltd. Link Intime India Private Ltd will be the registrar to the issue.

How subscriptions evolved in the IPO period?

While the QIB portion and the HNI / NII portion picked up traction on the last day, the overall journey was quite stable and spread out for the retail investors. In fact, the QIB portion, the HNI / NII portion and  the retail portion; all of them got fully subscribed on the first day of the IPO itself. As a result, even the overall IPO saw subscription book filling up an impressive 5.78 times, at the close of the first day of the IPO itself. The IPO was kept open for a total period of 3 days from November 22, 2023 to November 24, 2023. The table below captures the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 64.07 times subscribed at the close of the third and final day of the IPO on 24th November 2023. Here is a quick look at how the various categories saw traction on the last day of the IPO.

• The QIB portion got 1.35 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 3.14X to 129.00X.
   
• The HNI / NII portion got 8.01 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 27.24X to 62.23X.
   
• Retail portion got 7.35 times subscribed at the end of the first day of the IPO. However, on the last day of the IPO, the subscription moved from 18.25X to 28.95X.
   
• The overall IPO got 5.78 times subscribed at the end of the first day of the IPO. However, on last day of the IPO, overall subscription moved from 15.86X to 64.07X.

Rapid update on the overall IPO response

The IPO saw fairly modest to strong flows on Day-1 and Day-2, with most of the action visible only on Day-3 of the IPO. However, the IPO did close with relatively healthy subscription numbers at the close of Day-3. In fact, the IPO of Gandhar Oil Refinery India Ltd got fully subscribed on the first day of the IPO itself with full subscription also seen across categories. As per the combined bid details put out by the BSE at the close of Day-3, Gandhar Oil Refinery India Ltd IPO was subscribed 64.07X overall.

The best demand came from the QIB segment, followed by the HNI / NII segment and the retail segment in that order. In fact, the institutional segment and the HNI / NII segments saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion was relatively strong, although it was fully subscribed on Day-1 of the IPO itself, but subsequent traction was more stable. Firstly, let us look at the details of overall reservation of shares to different categories of investors.

Having understood the allocation of shares across various categories, Let us look at how the subscription data played out for the IPO at an overall level and at a more granular level.

As of close of 24th November 2023, out of the 212.44 lakh shares on offer in the IPO, Gandhar Oil Refinery India Ltd saw bids for 13,610.12 lakh shares. This implies an overall subscription of 64.07X. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors and the retail investors in that order. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Data Source: BSE

Subscription status of QIB Portion

On 21st November 2023, Gandhar Oil Refinery India Ltd completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated through the process of book building. A total of 88,88,018 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹169 per share (including premium of ₹167 per share) which resulted in an overall anchor allocation of ₹150.21 crore. The anchors absorbed 30.00% of the total issue size of ₹500.69 crore.

The QIB portion (net of anchor allocation as explained above) had a quota of 59.28 lakh shares of which it has got bids for 7,647.13 lakh shares at the close of Day-3, implying a subscription ratio of 129.00X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Gandhar Oil Refinery India Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO. Despite the large size of the IPO, the QIB response was very robust.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 62.23X (getting applications for 2,859.34 lakh shares against the quota of 45.95 lakh shares). That is a relatively strong response at the close of Day-3 largely because 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, and that was visible as the overall HNI / NII portion added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 59.89X while the below ₹10 lakh bid category (S-HNIs) got subscribed 66.90X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed 28.95X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 107.21 lakh shares on offer, valid bids were received for 3,103.65 lakh shares, which included bids for 2,681.17 lakh shares at the cut-off price. The IPO is priced in the band of (₹160 to ₹169 per share) and has closed for subscription as of the close of Friday, 24th November 2023.