Veranda Learning IPO - Subscription Day 1
The Rs.200 crore IPO of Veranda Learning Solutions, consisting entirely of a fresh issue of shares worth of Rs.200 crore, saw strong retail response on Day-1 of the IPO.
As per the combined bid details put out by the BSE at the end of Day-1, Veranda Learning Solutions IPO was subscribed 0.74 times overall, with good demand traction seen in the retail segment followed by some buying interest from the HNI / NII segment. The initial public offer (IPO) will close for subscription on Wednesday, 31st March 2022.
As of close of 29th March 2022, out of the 117.88 lakh shares on offer in the IPO, Veranda Learning Solutions saw bids for 87.53 lakh shares. This implies an overall subscription of 0.74X or 74% of the issue size. The granular break-up of subscriptions was dominated by retail investors followed by the HNI / NII investors with insignificant demand seen from 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.
Veranda Learning Solutions IPO Subscription Day 1
|
Category |
Subscription Status |
|
Qualified Institutional Buyers (QIB) |
0.05 Times |
|
Non Institutional Investors (NII) |
0.85 Times |
|
Retail Individuals |
4.15 Times |
|
Employees |
Not Applicable |
|
Overall |
0.74 times |
QIB Portion
On 28th March, Veranda Learning Solutions completed an anchor placement of shares to anchor investors. A total of 34,12,500 shares of Veranda Learning Solutions were allocated to 3 anchor investors as under.
|
Anchor Investor |
No. of Shares |
% of Anchor Portion |
Value Allocated |
% of Overall Issue Size |
|
AG Dynamic Funds Ltd |
18,24,900 |
53.48% |
Rs.25.00 crore |
12.50% |
|
Resonance Opportunities Fund |
7,30,000 |
21.39% |
Rs.10.00 crore |
5.00% |
|
Next Ventures Orbit Fund |
8,57,600 |
25.13% |
Rs.11.75 crore |
5.87% |
|
Total Anchor Allocation |
34,12,500 |
100.00% |
Rs.46.75 crore |
23.38% |
As can be seen from the above table, the total anchor allocation of Rs.46.75 crore was spread across just 3 investors. The total anchor allocation of 34.125 lakh shares was done at the upper price band of Rs.137. The total anchor allocation amounted to 23.38% of the total issue size. No anchor allocation was made to domestic mutual funds as part of the anchor placement.
Check - Veranda Learning Solutions IPO - Anchor placement details
The QIB portion (net of anchor allocation if any) has a quota of 79.42 lakh shares of which it has got bids for 4 lakh shares at the close of Day-1, implying 0.05x or 5% subscription for QIBs at the close of Day-1.
However, QIB bids typically get bunched on the last day, although we have to wait and see how the response mechanism of QIBs build up in the next 2 days of the IPO. The anchor demand was narrow but robust. It must also be remembered that the QIB allocation is 75% in the IPO followed by 15% for HNI / NIIs and 10% for retail.
HNI / NII Portion
The HNI portion got subscribed 0.85X or 85% (getting applications for 19.66 lakh shares against the quota of 23.08 lakh shares). This is a relatively OK response at the close of Day-1 with most of the response coming from corporates followed 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 IPO only.
Retail Individuals
The retail portion was subscribed a relatively strong 4.15 times at the close of Day-1 but that was more because the retail quota is just 10% of the issue size. Retail interest is normally seen in the first 2 days, so the eventual interest level looks to be building up for Day-2 and partially on Day-3.
For retail investors; out of the 15.38 lakh shares on offer, valid bids were received for 63.87 lakh shares, which included bids for 48.23 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.130-Rs.137) and will close for subscription on 31st March 2022.
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