Sunrest Lifescience IPO subscribed 48.54 times

About the Sunrest Lifescience IPO

Sunrest Lifescience IPO opened for subscription on 07th November 2023 and closed for subscription on 09th November 2023. The company has a face value of ₹10 per share and it is a fixed price issue; with the IPO price fixed at ₹84 per share. The IPO of Sunrest Lifescience Ltd has only a fresh issue component with no book built portion. As part of the fresh portion of the IPO, Sunrest Lifescience Ltd will issue a total of 12,91,200 shares (12.91 lakh shares approximately), which at the fixed IPO price of ₹84 per share aggregates to a total fund raising of ₹10.85 crore. Since there is no offer for sale portion, the total size of the fresh issue will be the total size of the IPO too. Hence the total IPO size will also comprise of 12.912 lakh shares, which at the fixed IPO price of ₹84 per share will aggregate to ₹10.85 crore. Mark Corporate Advisors Private Ltd will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue.

The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹134,400 (1,600 x ₹84 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 3,200 shares and having a minimum lot value of ₹268,800. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. Like every SME IPO, this issue also has a market making portion with inventory allocation of 65,600 shares. The market maker for the issue is SVCM Securities Private Ltd and they will provide two-way quotes to ensure liquidity on the counter post listing and low basis costs. Post the IPO, the promoter stake in the company will dilute from 100.00% to 69.91%. The fresh funds will be used by Sunrest Lifesciences Ltd for working capital and general corporate purposes.

Final subscription status of Sunrest Lifescience IPO

Here is the subscription status of Sunrest Lifescience IPO at close on 09th November 2023.

As can be seen from the above table, the overall IPO of Sunrest Lifescience Ltd got subscribed a rather improved 48.54 times. The Retail portion led the stakes with 65.74 times subscription, followed by the HNI / NII portion at 29.17 times subscription. There was no QIB portion allocation in the IPO. Overall, it was a moderate to good response for the IPO, approximately at par with the median subscriptions that SME IPOs have got in the past. The subscription has shown moderately good traction for the IPO across both the categories of investors, viz., the retail investors and the HNI / NII investors.

Allocation quota for various categories

The issue was open for QIBs, retail investors, and the HNI / NII investors. There was a broad quota designed for each of the segments viz. the retail, the QIB and the HNI / NII segments. A total of 65,600 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.

The anchor allotment is normally done a day ahead of the IPO opening. In the above case, being a relatively small sized IPO, there was no dedicated QIB quota. Obviously, since the anchor portion is carved out of the QIB portion, there was no anchor portion too in the IPO as the anticipated institutional interest was quite low. The market making portion of 5.08% is independent of the anchor allocation. The general practice is that the anchor portion is carved out of the QIB portion and hence, the QIB quota available to the public will be reduced by the anchor allocation size. In the above case, of course, there is no anchor allocation at all.

How subscription built up for the Sunrest Lifescience IPO?

The oversubscription of the IPO was dominated by the HNI / NII followed by the Retail category and the QIB category in that order. The table below captures the day-wise progression of the subscription status of Sunrest Lifescience Ltd. The IPO was kept open for 3 working days.

Here are the key takeaways from the subscription numbers on a day-wise basis for Sunrest Lifescience Ltd.

• The Retail portion got the best subscription in the Sunrest Lifescience Ltd IPO at 65.74 times and it got 5.86times subscribed on the first day of the IPO itself.
   
• The HNI / NII portion was behind the Retail portion in terms of subscription at 29.17 terms overall and it got 0.62 times subscribed at the end of the first day.
   
• While the retail portion getting fully subscribed at the end of the first day and the HNI / NII portion at the end of the second day, the overall IPO also got fully subscribed at 3.24 times at the close of the first day of the IPO itself. There was no QIB portion in the IPO.
   
• The Retail and HNI / NII portion saw the best traction on the last day of the IPO. The HNI / NII portion saw the total subscription ratio moving from 2.67X to 29.17X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 19.88X to 65.74X on the last day of the IPO.
   
• Just as the retail portion and the HNI portion saw the best incremental traction on the last day of the IPO, even the overall IPO saw smart traction on the last day with the subscription ratio for the overall IPO moving from 11.28X to 48.54X on the last day.

With the IPO closed for subscription at the end of November 09th, 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 15th November 2023 while the refunds would be initiated on 16th November 2023. The shares of Sunrest Lifescience Ltd (ISIN - INE0PLZ01012) would be credited to the demat accounts of eligible shareholders by the close of 17th November 2023 while the stock of Sunrest Lifescience Ltd is expected to be listed on 20th November 2023. The listing will happen on the NSE SME segment for small companies, which is distinct from the regular mainboard IPO space.