Alpex Solar IPO Closing Subscribed 324.03 times

About the Alpex Solar IPO

The stock of Alpex Solar IPO has a face value of ₹10 per share and it is a book building issue. The price band for the book building issue is set from ₹109 to ₹115 per share. Being a book built issue, the price will be discovered in the above band. The IPO of Alpex Solar Ltd has only a fresh issue component and no offer for sale (OFS) portion. It must be remembered that the fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership. As part of the fresh issue portion of the, Alpex Solar IPO will issue a total of 64,80,000 shares (64.80 lakh shares), which at the upper band of IPO price of ₹115 per share aggregates to fresh fund raising of ₹74.52 crore.

Since there is no offer for sale (OFS) portion, the fresh issue size will also double up as the overall IPO size. Therefore, the overall IPO size will also comprise of the issue of 64,80,000 shares (64.80 lakh shares) which at the upper band IPO price of ₹115 per share will aggregate to overall IPO size of ₹74.52 crore. Like every SME IPO, this IPO also has a market maker inventory allocation of 3,24,000 shares. SS Corporate Securities Private Ltd will be the market maker to the issue to provide two-way quotes to ensure liquidity and low basis costs post listing. Post-IPO, promoter stake in Alpex Solar Ltd will dilute from 93.53% to 68.76%.

The fresh issue funds will be used by the company towards capex for upgrading and expanding existing solar module facility and for capex of new manufacturing facility to make aluminium  frames for solar modules. Part of the proceeds will also be used to fund working capital gaps and for general corporate purposes. Corporate Capital Ventures Private Ltd will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue. The market maker for the issue is SS Corporate Securities Private Ltd. 

Read more about Alpex Solar IPO

Final subscription status of Alpex Solar IPO

Here is the subscription status of the Alpex Solar Ltd as at close on 12th February 2024.

As can be seen from the above table, the overall IPO of Alpex Solar Ltd got subscribed an impressive 324.03 times. The HNI / NII portion led the stakes with 502.31 times subscription, followed by the Retail portion at 351.89 times subscription. The QIB portion of the IPO also got a healthy subscription of 141.48 times. That is a very strong and smart 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 strong traction for the IPO across all the three categories of investors; QIB, retail and 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, QIB and the HNI / NII segments. A total of 3,24,000 shares were allocated as market maker portion to SS Corporate Securities Private Ltd, which will act as the 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 Alpex Solar Ltd, the anchor allocation of 18,45,600 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 47.48% of the issue size to 19.00% of the issue size. The anchor allocation bidding opened on February 07th, 2024 and also closed on the same day. A total of 18,45,600 shares were allocated across 8 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹115 per share (which includes face value of ₹10 per share and premium of ₹105 per share).

The total anchor allocation value was worth ₹21.22 crore. Out of the 8 anchor investors who got allotted 100% of the anchor portion; 5 anchor investors got allocated more than 85% of the anchor quota between them. These 5 anchor investors were; Persistent Growth Fund (32.50%), Astorne Capital VCC - Arven (21.72%), Beacon Stone Capital VCC (10.86%), Craft Emerging Market Fund (10.86%), and Acintyo Investment Fund (9.42%). These 5 anchor investors accounted for 85.36% of the overall anchor allocation. Out of the anchor shares allocated to investors on February 07th, 2024, a lock in of 30 days will be applicable for 50% of the shares (up to March 14th, 2024) and a lock-in of 90 days will be applicable for the remaining shares (up to May 13th, 2024). The allocation of market maker inventory of 5.02% is outside the anchor portion.

How subscription built up for the Alpex Solar 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 Alpex Solar 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 Alpex Solar Ltd.

• The HNI / NII portion got the best subscription in the Alpex Solar Ltd IPO at 502.31 times and it got 26.13 times subscribed on the first day of the IPO itself.
   
• The Retail portion was behind the HNI / NII portion in terms of subscription at 351.89 times overall and it got 50.44 times subscribed at the end of the first day.
   
• The QIB portion was third in the pecking order in terms of subscription at 141.48 times overall and it got exactly 0.09 times subscribed at the end of the first day.
   
• While the QIB portion got fully subscribed only on the last day, the retail and HNI / NII portion got fully subscribed on the first day of the IPO itself. Hence, the overall subscription was also filled up on the first day of the IPO itself. The overall IPO which saw subscription of 324.03 times got subscribed at 30.85 times at the close of the first day of 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 73.19X to 502.31X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 133.86X to 351.89X on the last day of the IPO.
   
• The last day traction story was true for QIBs and the overall IPO also. The QIB portion saw the total subscription ratio moving from 0.90X to 141.48X on the last day of the IPO. Finally, regarding the overall IPO subscription ratio, it also moved from 82.88X to 324.03X on the last day of the IPO.

Overall, the IPO of Alpex Solar Ltd is among the few SME IPOs in the last one year to have got subscribed more than 300 times and that is a good sign of things to come.

Next steps after the closure of the IPO

The issue opened for subscription on 08th February 2024 and closed for subscription on 12th February 2024 (both days inclusive). The basis of allotment will be finalized on 13th February 2024 and the refunds will be initiated on 14th February 2024. In addition, the demat credits are expected to happen on 14th February 2024 and the stock is scheduled to list on 15th February 2024 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The demat credits to the demat account to the extent of allotment will happen by the close of 14th February 2024 under ISIN Number (INE0R4701017).