Pentagon Rubber IPO Final Subscription Status

The IPO of Pentagon Rubber Ltd closed on Thursday, 30th June 2023. The IPO had opened for subscription on 26th June 2023. Let us look at the final subscription status of Pentagon Rubber Ltd at the close of subscription on 30th June 2023.

A quick word on Pentagon Rubber Ltd and the SME IPO

Pentagon Rubber IPO, is an SME IPO on the NSE which is opening for subscription on 26th June 2023. The company, Pentagon Rubber Ltd, was incorporated in the year 2004 and it manufactures rubber conveyor belts, transmission belts, rubber sheets and elevator belts. These are advanced precision and high tech rubber products that need a high degree of technological finesse. The manufacturing plant of Pentagon Rubber Ltd is located in Dera Bassi in the state of Punjab. It is roughly 25 KM away from the capital city of Chandigarh.

Pentagon Rubber has one of the longest conveyor belting presses in India with a production capacity of 21 metres in a single stroke. The unit has a production capacity of more than 300 square KM of rubber belts on an annual basis. To boost its R&D efforts, the company also has put in place a modern laboratory that can produce conveyor belts as per most of the global standards and protocols.  The company has a fairly large domestic and global export market and has received several accolades and awards in India and abroad

The ₹16.17 crore IPO of Pentagon Rubber Ltd comprises entirely of the said amount with no offer for sale (OFS) component in the IPO. The total SME IPO of Pentagon Rubber Ltd entails issue of 23.10 lakh shares at which at the upper band of the price range at ₹70 per share aggregates to ₹16.17 crore. The stock has a face value of ₹10 and has a price band of ₹65 to ₹70 per share. In the IPO, the retail bidders can bid in minimum lot size of 2,000 share each. Thus, the minimum investment of ₹140,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs can invest in 2 lots of 4,000 shares worth ₹280,000 as the bare minimum investment. There is no upper limit for the HNI / NII category. Pentagon Rubber Ltd will deploy the funds for working capital needs of the company and for general corporate purposes. Post the IPO, the promoter equity in the company will get diluted from 100.00% to 70.04%. The issue is lead managed by Beeline Capital Advisors Private Ltd, while Link Intime India Private Ltd will be the registrars to the issue. Let us now turn to the final subscription details of the IPO as of the close of subscription on 30th June 2023.

Final subscription status of Pentagon Rubber Ltd

Here is the subscription status of the Pentagon Rubber Ltd IPO as at close on 30th June 2023. The subscription is provided category wise to know how each category performed. The application level oversubscription provides a picture of retail appetite.

The issue was open for retail investors, QIBs and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the QIBs, 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.

As can be seen from the above table, a total of 6.56 lakh shares were allotted to anchor investors in the IPO worth ₹4.59 crore. The 6.56 lakh shares were allocated to 2 anchor investors as below at the upper end of the price band at ₹70. Details of the two anchor investors are as under.

The oversubscription of the IPO was dominated by the HNI / NIIs followed by the retail investors and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Pentagon Rubber Ltd 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 QIB portion. However, the HNI / NII portion got fully subscribed only on the second day of the IPO of Pentagon Rubber Ltd. However, the overall IPO was fully subscribed on the first day itself although most of the traction was seen on the last day. 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. There is an allocation of 116,000 shares to Sunflower Broking Ltd for market making, which has been included in the HNI / NII quota.

The IPO of Pentagon Rubber Ltd opened for subscription on 26th June 2023 and closed for subscription on 30th June 2023 (both days inclusive). The basis of allotment will be finalized on 05th July 2023 and the refunds will be initiated on 06th July 2023. In addition, the demat credits are expected to happen on 07th July 2023 and the stock is scheduled to list on 10th July 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.