E Factor Experiences IPO Closing subscription details
About the E Factor Experiences Ltd IPO
The IPO of E Factor Experiences Ltd opened for subscription on 27th September 2023 and closed for subscription on 03rd October 2023; both days inclusive. The company has a face value of ₹10 per share. It is a Book Built issue, with the price band for the IPO set in the range of ₹71 to ₹75 per share. The IPO of E Factor Experiences Ltd has only a fresh issue component and no offer for sale (OFS) component in the IPO. As part of the fresh issue portion of the IPO, E Factor Experiences Ltd will issue a total of 34,56,000 shares (34.56 lakh shares). At the upper band of the IPO price of ₹75 per share, the total value of the fresh issue portion aggregates to ₹25.92 crore. Since there is no offer for sale portion, the fresh issue will also be the total size of the issue. Therefore, the total issue size of E Factor Experiences Ltd will also entail the issue of 34,56,000 shares (34.56 lakh shares). At the upper band of the IPO price of ₹75 per share, the total IPO size of E Factor Experiences Ltd will be₹25.92 crore.
The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹120,000 (1,600 x ₹75 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 ₹240,000. There is no upper limit on what the QIBs and the HNI / NII investors can apply for. The fresh issue funds will be used for investing in its subsidiaries, repayment of certain borrowings and for working capital needs. Part of the funds would also be allocated towards general corporate expenses. While Hem Securities Ltd will be the lead manager to the issue, Maashitla Securities Private Ltd will be the registrar to the issue. The market maker for the issue will be Hem Finlease Ltd.
Final subscription status of E Factor Experiences Ltd
Here is the subscription status of the E Factor Experiences IPO as at close on 03rd October 2023.
|HNI / NIIs||168.26||4,92,800||8,29,16,800||621.88|
As can be seen from the above table, the overall IPO of E Factor Experiences Ltd got subscribed 73.14 times. The HNI / NII portion led the stakes with 168.26 times subscription, followed by the Retail portion at 47.78 times and the QIBs at 46.09 times. That is a very good response to an SME IPO, especially if you consider the median subscriptions that similar other SME IPOs have got in the past.
Allocation quota for various categories
The issue was open for retail investors, QIBs and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the QIBs, the retail and the HNI NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 1,74,400 shares were allocated as market maker portion to Hem Finlease Private Ltd, which will act as a market maker 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.
|Investor Category||Shares Offered|
|Anchor Investor Shares Offered||9,84,000 shares (28.47%)|
|Market Maker Shares Offered||1,74,400 shares (5.05%)|
|QIB Shares Offered||6,56,000 shares (18.98%)|
|NII (HNI) Shares Offered||4,92,800 shares (14.26%)|
|Retail Shares Offered||11,48,800 shares (33.24%)|
|Total Shares Offered||34,56,000 shares (100.00%)|
As can be seen, from the above table, the company had allocated 9.84 lakh shares or 28.47% of the original issue size to anchor investors. The anchor allotment was done a day ahead of the IPO opening on 26th September 2023 and the entire anchor allocation was spread across 4 anchor investors. The anchor allocation was done at the upper end of the price band at ₹75 per share, which includes share premium of ₹65 per share.
How subscription built up for the IPO of E Factor Experiences Ltd
The oversubscription of the IPO was dominated by the HNI / NII followed by the Retail category and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of E Factor Experiences Ltd IPO.
|Day 1 (Sep 26, 2023)||1.00||2.62||0.54||1.12|
|Day 2 (Sep 27, 2023)||1.00||2.55||1.43||1.55|
|Day 3 (Sep 28, 2023)||7.00||2.99||2.73||4.00|
|Day 4 (Oct 03, 2023)||46.09||168.26||47.78||73.14|
It is clear from the above table that while the HNI / NII portion got fully subscribed on the first day of the IPO itself, even the QIB portion got fully subscribed on the first day of the IPO itself. Interestingly, the Retail portion got subscribed only on the second day of the IPO. The IPO was open for a period of 4 days. However, all the 3 categories saw bunching of flows on the last day of the IPO. The overall IPO was also fully subscribed on the first day itself although most of the traction was seen on the last day.
All the 3 categories of investors viz., HNIs / NIIs, retail and QIB categories saw good traction and build-up of interest on the last day of the IPO. Post the IPO listing, the market maker will offer two way quotes on the stock, using the inventory of shares, and ensure that investors do not have to worry about liquidity and basis risk. The basis of allotment will be finalized on 06th October 2023 while the stock is expected to be listed on 11th October 2023.
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