Sula Vineyards IPO Final subscription details

Sula Vineyards IPO worth Rs. 960.35 crore , consisted entirely of an offer for sale for the full amount. There was no fresh issue portion in the IPO, so no fresh funds came in and it was not EPS dilutive. The IPO saw fairly tepid response on Day-1 and Day-2 of the IPO and closed with rather tepid subscription numbers at the close of Day-3. In fact, the company got fully subscribed only on the last day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Sula Vineyards Ltd IPO was subscribed at 2.33X overall, with best demand coming from the QIB segment, followed by the retail segment and the HNI / NII segment in that order. In fact, only the institutional segment saw some good traction on the last day. The HNI portion did get through but there was no surge of funding applications coming on the last day of the IPO.

As of close of 14th December 2022, out of the 188.30 lakh shares on offer in the IPO, Sula Vineyards Ltd saw bids for 438.37 lakh shares. This implies an overall subscription of 2.33X. The granular break-up of subscriptions was in favour of the QIB investors followed by the retail and the HNI / NII investors. QIB bids and NII bids typically gather most of the momentum on the last day, but that was not the case in this issue as even the final numbers were quite tepid. However, the NII bids hardly picked momentum even on the last day and just about managed to get through a one-time subscription at the end of Day-3.

Sula Vineyards Ltd IPO Subscription Day-3

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 09th December 2022, Sula Vineyards Ltd did an anchor placement of 80,70,158 shares at the upper end of the price band of Rs. 357 to 22 anchor investors raising Rs. 288.10 crore. The list of QIB investors included a number of marquee global names like Abu Dhabi Investment Authority, Goldman Sachs, New York State Retirement Fund, Ashoka Equity Fund, Jupiter India Fund, Morgan Stanley, Citigroup and BNP Paribas; 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 53.80 lakh shares of which it has got bids for 222.41 lakh shares at the close of Day-3, implying a subscription ratio of 4.13X 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 Sula Vineyards Ltd IPO subscription overall, the actual demand did not turn out to be quite as robust as expected for the IPO.

HNI / NII Portion

The HNI portion got subscribed 1.51X (getting applications for 60.88 lakh shares against the quota of 40.35 lakh shares). That is a rather tepid 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 not exactly visible as the overall HNI / NII portion just about added marginally to its heft on the last day. However, the HNI portion did eventually manage to sail through.

Now the NII/HNI portion is reported in two parts viz. bids below Rs. 10 lakhs (S-HNI) and bids above Rs. 10 lakhs (B-HNI). The bids above the Rs. 10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above Rs. 10 lakh bid category got subscribed 1.69X while the below Rs. 10 lakh bid category (S-HNIs) got subscribed 1.15X. 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 subscribed 1.65X at the close of Day-3, showing steady retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 94.15 lakh shares on offer, valid bids were received for only 155.08 lakh shares, which included bids for 136.65 lakh shares at the cut-off price. The IPO is priced in the band of (Rs. 340 to 357) and has closed for subscription as of the close of Monday, 14th December 2022.