Keystone Realtors IPO (Rustomjee) subscribed 2.01 times at close

Keystone Realtors IPO (Rustomjee) worth Rs 635 crore, consisted of a fresh issue of Rs 560 crore and an offer for sale of Rs 75 crore. While the fresh issue component infuses fresh funds into the company, it is also equity dilutive and EPS dilutive. However, the OFS is just a change of ownership. The IPO saw fairly tepid response on Day-1 and Day-2 of the IPO and actually got its one-time subscription only on the last day. It closed with rather tepid subscription numbers at the close of Day-3.

As per the combined bid details put out by the BSE at the close of Day-3, Keystone Realtors Ltd (Rustomjee) IPO was subscribed at just 2.01X overall, with best demand coming from the QIB segment, followed by the HNI / NII segment. The retail portion got undersubscribed getting just about half of the quota filled. In fact, the institutional segment and the HNI / NII segment saw most of the action only on the last day of the IPO. The HNI portion did do well but there was no surge of funding applications coming on the last day of the IPO.

As of close of 16th November 2022, out of the 86.48 lakh shares on offer in the IPO, Keystone Realtors Ltd (Rustomjee) saw bids for 173.72 lakh shares. This implies an overall subscription of 2.01X. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion got under subscribed. 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. However, the NII bids and the QIB bids overall did not inspire too much of excitement in the investors at large.

Keystone Realtors Ltd (Rustomjee) IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 11th November 2022, Keystone Realtors Ltd (Rustomjee) did an anchor placement of 35,21,255 shares at the upper end of the price band of Rs.541 per share to 16 anchor investors raising Rs.190.50 crore. The list of QIB investors included a number of marquee global names like Abu Dhabi Investment Authority, Morgan Stanley International, Troo Capital, Saint Capital and BNP Paribas Arbitrage; apart from a host of Indian mutual fund and insurance companies.

The QIB portion (net of anchor allocation as explained above) has a quota of 24.71 lakh shares of which it has got bids for 94.78 lakh shares at the close of Day-3, implying a subscription ratio of 3.84X 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 Keystone Realtors Ltd (Rustomjee) IPO subscription overall, the actual demand did not turn out to be very robust for the IPO.

HNI / NII Portion

The HNI portion got subscribed 3.03X (getting applications for 56.15 lakh shares against the quota of 18.53 lakh shares). That is a rather steady 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, although that was not exactly visible as the overall HNI / NII portion just about put up a relatively smart show. However, the HNI portion did eventually manage to sail through.

Now the NII/HNI portion is reported in two parts viz. bids below Rs10 lakhs (S-HNI) and bids above Rs10 lakhs (B-HNI). The bids above the Rs10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs10 lakh bid category got subscribed 3.78X while the below Rs10 lakh bid category (S-HNIs) got subscribed 1.53X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Retail Individuals

The retail portion was undersubscribed getting just 0.53X or 53% at the close of Day-3, very tepid retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 43.24 lakh shares on offer, valid bids were received for only 22.79 lakh shares, which included bids for 19.07 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.514-Rs.541) and has closed for subscription as of the close of Wednesday, 16th November 2022.