JSW Infrastructure IPO Subscribed at 37.37 times

JSW Infrastructure IPO has a face value of ₹2 per share while the price band for the book building IPO has been set in the band of ₹113 to ₹119 per share. The final price will be discovered within this band, through the process of book building. The fresh issue portion entailed the issue of 23,52,94,118 shares (23.53 crore shares approximately), which at the upper price band of ₹119 per share will translate into fresh issue size of ₹2,800 crore. Since there is no offer for sale component in the IPO, the fresh issue portion will also be the overall issue size. Hence, the overall issue size of JSW Infrastructure Ltd will comprise the issue of 23,52,94,118 shares (23.53 crore shares approximately), which at the upper price band of ₹119 per share will translate into fresh issue size of ₹2,800 crore

While the QIB portion picked up traction on the last day, the overall journey was quite slow in the first two days. In fact, the QIB portion got fully subscribed only on the last day of the IPO while the HNI / NII portion and the overall IPO got subscribed fully on the second day. Only the retail portion of the IPO got fully subscribed on the first day of the IPO itself. The table below captures the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 37.37 times subscribed at the close of the third and final day of the IPO on 27th September 2023.

Rapid update on the overall IPO response

The IPO saw fairly steady and tepid flows on Day-1 and Day-2 of the IPO but closed with relatively healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed only on the second day of the IPO, with only the retail portion getting fully subscribed on the first day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, JSW Infrastructure Ltd IPO was subscribed 37.37X overall, with best demand coming from the QIB segment, followed by the HNI / NII segment and the retail segment in that order. In fact, the institutional segment 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 timid, although it was fully subscribed on Day-1 of the IPO itself. Firstly, let us look at the details of overall allocation.

As of close of 27th September 2023, out of the 1,362.83 lakh shares on offer in the IPO, JSW Infrastructure Ltd saw bids for 50,932.86 lakh shares. This implies an overall subscription of 37.37X overall. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion got the lowest subscription among the various categories. 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.

Subscription status of QIB Portion

On 24th September 2023, JSW Infrastructure IPO completed the bidding for its anchor allocation. There was a strong and robust response as the anchor investors participated through the process of book building. A total of 10,58,82,352 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹119 (including premium of ₹117 per share) which resulted in an overall allocation of ₹1,260 crore. The anchors absorbed 45% of the total issue size of ₹2,800 crore.

The QIB portion (net of anchor allocation as explained above) had a quota of 743.36 lakh shares of which it has got bids for 42,436.97 lakh shares at the close of Day-3, implying a subscription ratio of 57.09X 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 JSW Infrastructure Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 15.99X (getting applications for 5,941.46 lakh shares against the quota of 371.68 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 17.04X while the below ₹10 lakh bid category (S-HNIs) got subscribed 13.88X. 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 just 10.31X at the close of Day-3, showing relatively strong appetite. It must be noted that retail allocation is just 10% in this IPO. For retail investors; out of the 247.79 lakh shares on offer, valid bids were received for 2,554.43 lakh shares, which included bids for 2,195.10 lakh shares at the cut-off price. The IPO is priced in the band of (₹113 to ₹119) and has closed for subscription as of the close of Wednesday, 27th September 2023.