DelaPlex IPO Final Subscribed 177.80 times

Tanushree Jaiswal Tanushree Jaiswal 31st January 2024 - 01:37 pm
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About the DelaPlex IPO

The stock of DelaPlex Ltd has a face value of ₹10 per share and it is a book built issue. The price band for the book built issue has been set in the range of ₹186 to ₹192 per share. The final price of the IPO will be decided within this price band. DelaPlex IPO has a fresh issue component and also an offer for sale (OFS) portion. While fresh issue portion is EPS and equity dilutive, OFS is just a transfer of ownership and  hence neither EPS nor equity dilutive. As part of the fresh issue portion of the IPO, DelaPlex Ltd will issue a total of 18,00,000 shares (18.00 lakh shares), which at the upper band of the book building band of ₹192 per share aggregates to fresh fund raising of ₹34.56 crore. The offer for sale (OFS) will entail the sale of 6,00,000 shares (6.00 lakh shares), which at the upper band of the book building band of ₹192 per share aggregates to total OFS size of ₹11.52 crore. The entire 6 lakh shares are being offered in the OFS by the US parent of the company, DelaPlex Inc.

Consequently, the overall IPO size will comprise of the fresh issue and sale of 24,00,000 shares (24.00 lakh shares) which at the upper IPO band price of ₹192 per share will aggregate to overall IPO size of ₹46.08 crore. Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 1,22,400 shares. Shreni Shares Private Ltd will be the market maker to the issue. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs, post listing. Post the IPO the promoter stake will stand diluted from 100.00% to 73.66%. DelaPlex Ltd will sue the fresh issue proceeds for advertising and marketing expenses towards brand building; funding office capex and office working capital expenses. Shreni Shares Ltd will be the lead manager to the issue, and Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Shreni Shares Private Ltd.

Final subscription status of DelaPlex IPO

Here is the subscription status of the DelaPlex IPO as at close on 30th January 2024.

Investor
Category

Subscription
(times)

Shares
Offered

Shares
bid for

Total Amount
(₹ in crore

Anchor Investors

1

6,82,800

6,82,800

13.11

Market Maker

1

1,22,400

1,22,400

2.35

QIB Investors

90.91

4,55,400

4,14,01,800

794.91

HNIs / NIIs

335.23

3,42,000

11,46,48,000

2,201.24

Retail Investors

159.91

7,97,400

12,75,10,200

2,448.20

Total

177.80

15,94,800

28,35,60,000

5,444.35

Total Applications: 2,12,517 applications (159.91 times)

As can be seen from the above table, the overall IPO of DelaPlex Ltd got subscribed an impressive 177.80 times. The HNI / NII portion led the stakes with 335.23 times subscription, followed by the Retail portion at 159.91 times subscription. The QIB portion of the IPO also got a healthy subscription of 90.91 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 1,22,400 shares were allocated as market maker portion to Shreni Shares 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.

Investor Category

Number of shares allocated to the category

Market Maker Shares

1,22,400 shares (5.10% of the total issue size)

Anchor Allocation

6,82,800 shares (28.45% of the total issue size)

QIB Shares Offered

4,55,400 shares (18.98% of the total issue size)

NII (HNI) Shares Offered

3,42,000 shares (14.25% of the total issue size)

Retail Shares Offered

7,97,400 shares (33.23% of the total issue size)

Total Shares Offered

24,00,000 shares (100.00% of total issue size)

In the above IPO of DelaPlex Ltd, the anchor allocation of 6,82,800 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 47.43% of the issue size to 18.98% of the issue size. The anchor allocation bidding opened on January 24th, 2024 and also closed on the same day. A total of 6,82,800 shares were allocated across 9 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹192 per share (which includes face value of ₹10 per share and premium of ₹182 per share).

The total anchor allocation value was worth ₹13.11 crore. Out of the 9 anchor allotees, the top 4 anchor allottees with double digit share in the anchor allocation quota included Chanakya Opportunities Fund - I (22.93%), Kingsman Wealth Fund (15.29%), Silver Stallion Fund (13.01%), and Meru Investment Fund PCC – Cell I (10.54%). These 4 anchor investors accounted for 61.77% of the overall anchor allocation. In addition, there were 5 other anchor allottees with an allocation of 7.64% each; accounting for the balance. Out of the anchor shares allocated to investors on January 24th, 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 June 13th, 2024). The allocation of market maker inventory of 5.10% is outside the anchor portion.

How subscription built up for the DelaPlex 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 DelaPlex Ltd. The IPO was kept open for 4 working days.

Date

QIB

NII

Retail

Total

Day 1 (Jan 25, 2024)

0.58

1.97

5.08

3.13

Day 2 (Jan 29, 2024)

0.68

26.93

47.93

29.93

Day 3 (Jan 30, 2024)

90.91

335.23

159.91

177.80

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

  • The HNI / NII portion got the best subscription in the DelaPlex Ltd IPO at 335.23 times and it got 1.97 times subscribed on the first day of the IPO itself.
     
  • The Retail portion was behind the HNI / NII portion in terms of subscription at 159.91 times overall and it got 5.08 times subscribed at the end of the first day.
     
  • The QIB portion was third in the pecking order in terms of subscription at 90.91 times overall and it got 0.58 times subscribed at the end of the first day.
     
  • While the retail and HNI / NII portion got fully subscribed on the first day of the IPO itself, the QIB portion got fully subscribed only on the third and final day of the IPO. However, the overall subscription was filled up on the first day itself. The overall IPO which saw subscription of 177.80 times also got fully subscribed at 3.13 times at the close of the first day of the IPO itself.
     
  • 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 26.93X to 335.23X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 47.93X to 159.91X 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 0.68X to 90.91X on the last day of the IPO. Finally, regarding the overall IPO subscription ratio, it also moved from 29.93X to 177.80X on the last day of the IPO.

 

Overall, the IPO of DelaPlex Ltd is among the few SME IPOs in the last one year to have got subscribed more than 175 times and that is a good sign of things to come.

Next steps after the closure of the IPO

With the IPO closed for subscription at the end of January 30th, 2024, 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 31st January 2024 and the refunds will be initiated on 31st January 2024 itself. In addition, the demat credits are expected to happen on 01st February 2024 and the stock is scheduled to list on 02nd 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 01st February 2024 under ISIN Number (INE0SK801018).

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