Protean eGov Technologies IPO oversubscribed at 23.86x

Protean eGov Technologies IPO opened for subscription on 06th November 2023 and closed on 08th November 2023. The stock of the company has a face value of ₹10 per share and the price band for the book building IPO has been set in the range of ₹752 to ₹792. The final price will be discovered within this band. The IPO of Protean eGov Technologies Ltd was entirely an offer for sale (OFS) with no fresh issue component in the IPO. The offer for sale (OFS) portion of the IPO of Protean eGov Technologies Ltd comprises the sale of 61,91,000 shares (61.91 lakh shares), which at the upper price band of ₹792 per share will translate into an offer for sale (OFS) size of ₹490.33 crore. Being a professionally managed company with no identifiable promoter group, the entire OFS will be by investor shareholders only. There will 11 shareholders offering shares under the OFS portion. Being a professionally managed company, all the shareholders offering shares in the OFS of Protean eGov Technologies Ltd will be investor shareholders only.

The key participants offering shares in the OFS include NSE Investments Ltd, SUUTI (UTI administrator), HDFC Bank, Axis Bank, Deutsche Bank, Union Bank of India and 360 One Special Opportunities Fund (part of the IIFL group). Since there is no fresh issue, the OFS will also double as the overall issue size. Therefore, the overall IPO of Protean eGov Technologies Ltd will also mirror the OFS and entail the sale of 61,91,000 shares (61.91 lakh shares), which at the upper price band of ₹792 per share will translate into total IPO issue size of ₹490.33 crore. Being entirely an offer for sale, there will be no fresh funds coming into the company from the IPO. The IPO will be ICICI Securities, Equirus Capital, IIFL Securities and Nomura Financial Advisory. 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 slow for the retail investors. In fact, the QIB portion got fully subscribed only on the third and final day of the IPO while the HNI / NII portion and the retail portion got fully subscribed on the first day of the IPO itself. Even the overall IPO saw subscription book filling up 1.08 times, at the close of the first day of the IPO itself. The IPO was kept open for a total period of 3 days. The table below captures the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got 23.86 times subscribed at the close of the third and final day of the IPO on 08th November 2023. The best traction was seen on the last day for the QIB investors and the HNI Investors. In the case of QIB investors, the subscription ratio surged from 0.07 times to 46.94 times on the third and final day of the IPO, while in the case of HNI / NII category, the subscription increased from 6.24 times to 31.62 times on the last day. As a result, even the overall subscription saw the best traction on the last day of the IPO, growing from 3.22 times subscription to 23.86 times subscription.

Rapid update on the overall IPO response

The IPO saw fairly tepid to regular 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 Protean eGov Technologies Ltd got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, Protean eGov Technologies IPO was subscribed 23.86X 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 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. Firstly, let us look at the details of overall allocation.

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 08th November 2023, out of the 43.79 lakh shares on offer in the IPO, Protean eGov Technologies Ltd saw bids for 1,044.65 lakh shares. This implies an overall subscription of 23.86X overall. 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 03rd November 2023, Protean eGov Technologies 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 18,12,300 shares were allotted to the anchor investors. The allocation was done at the upper IPO price band of ₹792 per share (including premium of ₹782 per share) which resulted in an overall allocation of ₹143.53 crore. The anchors absorbed 29.27% of the total issue size of ₹490.33 crore.

The QIB portion (net of anchor allocation as explained above) had a quota of 12.08 lakh shares of which it has got bids for 567.09 lakh shares at the close of Day-3, implying a subscription ratio of 46.94X 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 Protean eGov Technologies 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 31.62X (getting applications for 286.54 lakh shares against the quota of 9.06 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 33.14X while the below ₹10 lakh bid category (S-HNIs) got subscribed 28.58X. 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 8.93X at the close of Day-3, showing relatively moderate to strong appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 21.14 lakh shares on offer, valid bids were received for 188.78 lakh shares, which included bids for 160.35 lakh shares at the cut-off price. The IPO is priced in the band of (₹752 to ₹792 per share) and has closed for subscription as of the close of Wednesday, 08th November 2023.