Marco Cables & Conductors IPO Final Subscription Status

Marco Cables & Conductors IPO closed on Monday, 25th September 2023. The IPO had opened for subscription on 21st September 2023. Let us look at the final subscription status of Marco Cables & Conductors Ltd at the close of subscription on 25th September 2023. The price for the fixed price IPO was ₹36 per share and the stock has a face value of ₹10 per share.

About the Marco Cables & Conductors IPO

Marco Cables & Conductors IPO has a fresh issue component and also an offer for sale (OFS) portion. As part of the fresh issue portion of the IPO, Marco Cables & Conductors Ltd issued a total of 26,01,000 shares (26.01 lakh shares), which at the fixed IPO price of ₹36 per share aggregates to a total fund raising of ₹9.36 crore. As part of the offer for sale (OFS) portion of the IPO, there was a total sale of an equivalent 26,01,000 shares (26.01 lakh shares), which at the fixed IPO price of ₹36 per share aggregates to a total OFS size of ₹9.36 crore. The entire OFS sale of 26.01 lakh shares will be done by the promoter of the company, Sumit Sugnomal Kukreja. As a result, the total issue size of Marco Cables & Conductors Ltd will entail the issue and sale of 52,02,000 shares (52.02 lakh shares), which at the fixed IPO price of ₹36 per share aggregates to a total fund raising of ₹18.73 crore.

The minimum lot size for the IPO investment is 3,000 shares. Thus, retail investors can invest a minimum of ₹108,000 (3,000 x ₹36 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 ₹216,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

Final subscription status of Marco Cables & Conductors IPO

Here is the subscription status of the Marco Cables & Conductors IPO as at close on 25th September 2023.

The issue was open for retail investors and for the non-retail investors; which hare predominantly the HNI / NII category and to a lesser extent the corporates and the institutions. There was a broad quota designed for each of the segments and 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 2,88,000 shares were allocated as market maker portion to Shreni Shares 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.

Here is a quick look at how the share allocation was made across categories in terms of the quotas available for subscription.

As can be seen, from the above table, the company had not allocated any shares for the anchor investors and did not have any dedicated QIB quota in the IPO. The only allocation made was the 5.54% allocation to the market maker to provide liquidity on the counter. The net offer to the public (net of market maker inventory) was distributed between the retail investors and the non-retail investors.

How subscription built up for the IPO of Marco Cables & Conductors Ltd

The oversubscription of the IPO was dominated by the retail investors followed by the HNI / NIIs in that order. The table below captures the day-wise progression of the subscription status of Marco Cables & Conductors IPO.

It is clear from the above table that while the retail portion got fully subscribed on the first day of the IPO itself as did the HNI / NII portion, which also got fully subscribed only on the first day of the IPO itself. As a result, the overall IPO also got fully subscribed on the first day of the IPO. Both the retail and the non-retail portion saw good traction on the last day, although at 30.90 times, the subscription is above the median of SME IPOs. There is an allocation of 2,88,000 shares to Shreni Shares Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

Here are the key dates relevant for the IPO of Marco Cables & Conductors Ltd

The IPO of Marco Cables & Conductors Ltd will get listed in the NSE SME segment, which is the segment on which the NSE incubates the listed start-ups.

A quick word on Marco Cables & Conductors Ltd and the SME IPO

Marco Cables & Conductors Ltd was incorporated in the year 1989 and is engaged in the business of manufacturing and selling wires, cable wires, and conductors in India. The product portfolio of Metro Cables & Conductors Ltd include LT Aerial Bunched Cables, LT PVC Cables, AAAC Conductors, LT XLPE Cables and ASCSR Conductors. The manufacturing unit of Marco Cables & Conductors Ltd is located at Nashik in Maharashtra. The company has a combined installed production capacity of 18,000 KM (length in kilometre) of cables and wires per year. The LT Aerial Bunched Cables are used for overhead power distribution. These bunched cable provide high levels of safety and reliability combined with low instance of power loss and less chances of power pilferage. It also substantially reduces installation, maintenance, and operating costs; and is ideal for hilly, coastal and forest terrains.

The company has been promoted by Sumit Sugnomal Kukreja, Sugnomal Mangandas Kukreja, and Komal Sumit Kukreja. The promoter holding in the company currently stands at 100.00%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will get diluted to 72.18%. The fresh issue funds will be used by the company for meeting its capex towards purchase of solar power system and 1+12 Rigid Standing Machine. Part of the monies raised will also go towards working capital needs and general corporate expenses. While Shreni Shares Private Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Shreni Shares Private Ltd.