Sameera Agro IPO Subscribed 2.92 times

About the Sameera Agro and Infra IPO

The stock of Sameera Agro and Infra Ltd has a face value of ₹10 per share and it is a fixed price issue with the IPO price already set at ₹180 per share. The IPO of Sameera Agro and Infra Ltd has only a fresh issue component and no offer for sale (OFS) portion. The fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership and  neither EPS or equity dilutive. As part of the fresh portion of the Sameera Agro and Infra IPO will issue 34,80,000 shares (34.80 lakh shares), which at the fixed IPO price of ₹180 per share aggregates to a fresh fund raising of ₹62.64 crore. Since there is no offer for sale (OFS) portion, the fresh IPO size will also double up as the overall IPO size. Therefore, the overall IPO will also comprise of the issue of 34,80,000 shares (34.80 lakh shares) which at the fixed IPO price of ₹180 per share is worth ₹62.64 crore.

Like every SME IPO, this issue also has a market making portion with a market maker portion allocation of 1,84,000 shares to SVCM Securities Private Ltd (market makers). They will provide two-way quotes to ensure liquidity on the counter and low basis costs. Post the IPO, the promoter stake in Sameera Agro and Infra Ltd will dilute from 97.49% to 69.00%. The fresh funds will be used by the company for construction of ongoing projects, construction of new multiplex, and meeting working capital needs of the Agritech business. First Overseas Capital Ltd will be the lead manager to the issue, and KFIN Technologies Ltd will be the registrar to the issue.

Final subscription status of Sameera Agro and Infra Ltd

Here is subscription status of Sameera Agro and Infra Ltd at close on 27th December 2023.

As can be seen from the above table, the overall IPO of Sameera Agro and Infra Ltd got subscribed a very tepid 2.92 times overall. The retail portion led the stakes with 4.14 times subscription, followed by the HNI / NII portion at 1.70 times subscription. There was no dedicated QIB allocation in this IPO. That is a very weak and tepid response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past. The subscription has shown tepid traction for the IPO across both the categories of investors; retail and HNI / NII investors.

Allocation quota for various categories

The issue was open for retail investors and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, and the HNI / NII segments. A total of 1,84,000 shares were allocated as market maker portion to SVCM Securities Private Ltd, which will act as market maker inventory 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. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

In the above IPO of Sameera Agro and Infra Ltd, there is no QIB allocation in the IPO. The anchor allocation to the anchor investors is normally done out of this QIB allocation and hence the company has not done any anchor allocation in the IPO. Normally, the anchor is done to institutional investors, which gives confidence and assurance to the retail shareholders about the institutional interest in the stock The anchor allocation is normally adjusted and deducted from the QIB quota and only the net number of shares is available for public issue under the QIB portion.

However, in this case, there is neither any QIB quota, nor any anchor allocation to investors ahead of the IPO. Normally, the anchor portion bidding is done on the day before the IPO opens and such anchor investments are subjected to lock in at two levels. Half the anchor allocation is locked in for 30 days while the balance anchor allocation shares are locked in for a period of 90 days. The allocation of market maker inventory of 5.29% is outside the anchor portion. The market making portion is more towards ensuring liquidity post listing and ensuring low basis spreads on the stock.

How subscription built up for the IPO of Sameera Agro and Infra Ltd

It was a rather tepid show by the IPO in terms of subscription, despite staying open for 4 days. The oversubscription of the IPO was dominated by the retail investors followed by the HNI / NII category in that order. The table below captures the day-wise progression of the subscription status of Sameera Agro and Infra Ltd. The IPO was open for 4 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Sameera Agro and Infra Ltd.

• The retail portion got the best subscription in the Sameera Agro and Infra Ltd IPO at 4.14 times and it got 0.26 times subscribed on the first day of the IPO.
   
• The HNI / NII portion was behind the retail portion in terms of subscription at 1.70 times overall and it got 0.28 times subscribed at the end of the first day.
   
• While the retail and HNI / NII portion got fully subscribed only on the third day of the IPO, even the overall subscription was filled up on the third day of the IPO only. The overall IPO which saw subscription of 2.92 times also got subscribed at just 0.27 times at the close of the first day of the IPO.
   
• The retail, and HNI / NII portion saw nominal traction on the last day of the IPO. The HNI / NII portion saw the total subscription ratio moving from 1.28X to 1.70X on the last day of the IPO. Even the retail portion saw the total subscription ratio marginally move from 2.38X to 4.14X on the last day of the IPO.
   
• The last day traction story was marginal for the overall IPO subscription ratio also. The subscription ratio overall moved from 1.83X to 2.92X on the last day of the IPO.

With the IPO closed for subscription at the end of December 27th, 2023, the next piece of action shifts to the finalization of the basis of allotment and later to the listing of the IPO. The basis of allotment will be finalized on 28th December 2023 while the refunds would be initiated on 29th December 2023. The shares of Sameera Agro and Infra Ltd (ISIN - INE0PZA01015) would be credited to the demat accounts of eligible shareholders by the close of 29th December 2023 while the stock of Sameera Agro and Infra Ltd is expected to be listed on 01st January 2024. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.