Ruchi Soya FPO - Subscription Day 1
The Rs.4,300 crore FPO of Ruchi Soya Ltd, consisting entirely of a fresh issue of shares worth of Rs.4,300 crore, saw tepid response on Day-1 of the FPO. As per the combined bid details put out by the BSE at the end of Day-1, Ruchi Soya FPO was subscribed 0.12X or 12% overall, with some semblance of demand from the retail segment and almost no demand from the HNI and QIB segment.
Interestingly, it was the employee quota that is already oversubscribed. The follow-on public offer (FPO) will close for subscription on Monday, 28th March 2022.
As of close of 24th March 2022, out of the 489.46 lakh shares on offer in the FPO, Ruchi Soya Ltd saw bids for 56.31 lakh shares. This implies an overall subscription of 0.12X or 12%. The granular break-up of subscriptions was dominated by retail investors with hardly any demand from the HNIs and the QIBs.
Normally, it is only on the last day of bidding, the NII/HNI bids and the QIB bids build up substantial momentum. We should get a clearer picture by the end of third day of subscription only.
Ruchi Soya FPO Subscription Day 1
Qualified Institutional Buyers (QIB)
Non Institutional Investors (NII)
Let us first talk about the pre-FPO anchor placement. On 23rd March, Ruchi Soya Ltd did an anchor placement of 1,98,43,153 shares at the upper end of the price band of Rs.650 to a total of 46 anchor investors raising Rs.1,290 crore, representing 30% of the total issue size.
The list of QIB anchors included a number of marquee international names like YAS TAKAUL, SBI Life, Authum Investments, Winro Commercial, AG Dynamics Fund, Societe Generale, Volrado Fund, Quant Fund, Kotak MF, Birla MF, Belgrave Investments, Cohesion MK Best Ideas, Alchemy, ASK India, HDFC Life Insurance and the Oman Sovereign Fund.
The QIB portion (net of anchor allocation as explained above) has a quota of 139.82 lakh shares of which it has got bids for 1.55 lakh shares at the close of Day-1, implying 0.01X or 1% subscription for QIBs at the close of Day-1.
However, QIB bids typically get bunched on the last day but the strong response in the anchor placement shows that there is healthy and substantial institutional appetite for the FPO.
HNI / NII Portion
The HNI portion got subscribed 0.03X or 3% (getting applications for 3.52 lakh shares against the quota of 104.86 lakh shares). This is a relatively tepid response at the close of Day-1 with most of the response coming from corporates, following by HNI individuals.
However, 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 FPO only.
The retail portion was subscribed a relatively better 0.21X or 21% at the close of Day-1, potential retail appetite; as has been the general trend with IPOs and FPOs. It must be noted that retail allocation is 35% in this FPO.
For retail investors; out of the 244.68 lakh shares on offer, valid bids were received for 51.06 lakh shares, which included bids for 41.67 lakh shares at the cut-off price. The FPO is priced in the band of (Rs.615-Rs.650) and will close for subscription on 28th March 2022.
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