FoneBox IPO Final Subscribed 659.42 times

Tanushree Jaiswal Tanushree Jaiswal 31st January 2024 - 01:30 pm
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About the Fonebox Retail IPO

The stock of Fonebox Retail IPO 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 ₹66 to ₹70 per share. The final price of the IPO will be decided by book building within this price band. The IPO of Fonebox Retail Ltd has only a fresh issue component and no offer for sale (OFS) portion. As part of the fresh issue portion of the IPO, Fonebox Retail IPO will issue a total of 29,10,000 shares (29.10 lakh shares), which at the upper band of the book building band of ₹70 per share aggregates to fresh fund raising of ₹20.37 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 29,10,000 shares (29.10 lakh shares) which at the upper IPO band price of ₹70 per share will aggregate to overall IPO size of ₹20.37 crore.

Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 1,46,000 shares. The name of the market maker for the issue is yet to be announced.. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs, post listing. Post the IPO, the share of promoters will dilute from 100.00% to 71.64%. The fresh issue funds will be used by the company for meeting working capital expenses and for general corporate purposes. Beeline Capital Advisors Private Ltd will be the lead manager to the issue, and KFIN Technologies Ltd will be the registrar to the issue.

Final subscription status of Fonebox Retail IPO

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

Investor
Category

Subscription
(times)

Shares
Offered

Shares
bid for

Total Amount
(₹ in crore)

Anchor Investors

1

8,26,000

8,26,000

5.78

Market Maker

1

1,46,000

1,46,000

1.02

QIB Investors

138.69

5,56,000

7,71,14,000

539.80

HNIs / NIIs

819.99

4,16,000

34,11,14,000

2,387.80

Retail Investors

886.32

9,70,000

85,97,34,000

6,018.14

Total

659.42

19,38,000

1,27,79,62,000

8,945.73

Total Applications: 4,29,867 applications (886.32 times)

As can be seen from the above table, the overall IPO of Fonebox Retail Ltd got subscribed an impressive 659.42 times. The Retail Investor portion led the stakes with 886.32 times subscription, followed by the HNI / NII portion at 819.99 times subscription. The QIB portion of the IPO also got a healthy subscription of 138.69 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 1,46,000 shares were allocated as market maker portion to Spread X Securities 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

1,46,000 shares (5.02% of the total issue size)

Anchor Shares Allocated

8,26,000 shares (28.38% of the total issue size)

QIB Shares Offered

5,56,000 shares (19.11% of the total issue size)

NII (HNI) Shares Offered

4,16,000 shares (14.30% of the total issue size)

Retail Shares Offered

9,70,000 shares (33.33% of the total issue size)

Total Shares Offered

29,10,000 shares (100.00% of total issue size)

In the above IPO of Fonebox Retail Ltd, the anchor allocation of 8,26,000 shares was carved out of the QIB portion, as a result of which the QIB offer to the public reduced from the original 47.49% of the issue size to 19.11% of the issue size. The anchor allocation bidding opened on January 24th, 2024 and also closed on the same day. A total of 8,26,000 shares were allocated across 2 anchor investors. The anchor allocation was done at the upper end of the IPO price band of ₹70 per share (which includes face value of ₹10 per share and premium of ₹60 per share).

The total anchor allocation value was worth ₹5.78 crore. The 2 anchor investors that got the entire anchor allocation quota included NAV Capital VCC – NAV Capital Emerging Star Fund (82.57%), and LC Radiance Fund VCC (17.43%). These 2 anchor investors accounted for 100% of the overall anchor allocation. 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 5.02% is outside the anchor portion.

How subscription built up for the Fonebox Retail 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 Fonebox Retail Ltd. The IPO was kept open for 3 working days.

Date

QIB

NII

Retail

Total

Day 1 (Jan 25, 2024)

0.01

9.93

25.47

14.88

Day 2 (Jan 29, 2024)

3.82

143.88

300.01

182.14

Day 3 (Jan 30, 2024)

138.69

819.99

886.32

659.42

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

  • The Retail Investor portion got the best subscription in the Fonebox Retail Ltd IPO at 886.32 times and it got 25.47 times subscribed on the first day of the IPO itself.
     
  • The HNI / NII portion was behind the Retail Investor portion in terms of subscription at 819.99 times overall and it got 9.93 times subscribed at the end of the first day.
     
  • The QIB portion was third in the pecking order in terms of subscription at 138.69 times overall and it got just 0.01 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 only got fully subscribed on the second day. However, the overall subscription was filled up on the first day itself. The overall IPO which saw subscription of 659.42 times at close, also got fully subscribed at 14.88 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 143.88X to 819.99X on the last day of the IPO. Even the retail portion saw the total subscription ratio move from 300.01X to 886.32X 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 3.82X to 138.69X on the last day of the IPO. Finally, regarding the overall IPO subscription ratio, it also moved from 182.14X to 659.42X on the last day of the IPO.

 

Overall, the IPO of Fonebox Retail Ltd became one of the few SME IPOs in the last one year to have got subscribed more than 650 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 01st February 2024. In addition, the demat credits are also 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 (INE0Q4701019).

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