KFIN Technologies IPO gets 45% anchor allocated

KFIN Technologies IPO Anchor Allotment
KFIN Technologies IPO Anchor Allotment

IPOs
by 5paisa Research Team Last Updated: 2022-12-19T16:13:40+05:30

KFIN Technologies IPO anchor issue saw a robust response on 16th December 2022 with 45% of the IPO size getting absorbed by the anchors. Out of the 4,09,83,607 shares on offer, the anchors picked up 1,84,42,623 shares accounting for 45% of the total IPO size. The anchor placement reporting was made to the BSE late on Friday. The IPO of KFIN Technologies Ltd opens on 19th December 2022 in the price band of Rs. 347 to Rs. 366 and will close for subscription on 21st December 2022 (both days inclusive). The entire anchor allocation was made at the upper price band of Rs. 366. Let us focus on the anchor allotment portion ahead of the KFIN Technologies Ltd IPO.

Before we go into the details of the actual anchor allotment, a quick word on the process of anchor placement. The anchor placement ahead of an IPO/FPO is different from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. It is just to give confidence to investors that the issue is backed by large established institutions.

However, the anchor investors cannot be allotted shares at a discount to the IPO price. This is explicitly stated in the SEBI revised regulations as under, “As per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, in case the Offer Price discovered through book building process is higher than the Anchor Investor Allocation Price, then the Anchor investors will be required to pay the difference by the pay-in as specified in the revised CAN.

An anchor investor in an IPO is normally a qualified institutional buyer (QIB) like a foreign portfolio investor or mutual fund or insurance company or a sovereign fund which invests before the IPO is made available to the public as per SEBI regulations. Anchor portion is part of the public issue, so the IPO portion to the public (QIB portion) is reduced to that extent. As initial investors, these anchors make the IPO process more attractive for investors, and instil confidence in them. Anchor investors also largely aid in price discovery of the IPO

Anchor placement story of KFIN Technologies Ltd

On 16th December 2022, KFIN Technologies Ltd completed the bidding for its anchor allocation. There was an enthusiastic response as the anchor investors participated through the process of book building. A total of 1,84,42,623 shares were allotted to a total of 44 anchor investors. The allocation was done at the upper IPO price band of Rs. 366 which resulted in an overall allocation of Rs. 675 crore. The anchors have already absorbed 45% of the total issue size of Rs. 1,500 crore, which is indicative of the robust institutional demand.

Listed below are the 16 anchor investors who got allotted at least 2.00% of the total anchor allocation individually. The entire anchor allocation of Rs. 675 crore was spread across 44 major anchor investors. These top 16 anchor investors listed below accounted for 64.31% of the total anchor allocation of KFIN Technologies Ltd.

Anchor Investor

No. of Shares

% of Anchor Portion

Value Allocated

Goldman Sachs India Equity Fund

13,66,120

7.41%

Rs.50.00 crore

Nippon India Banking and FS Fund

13,66,120

7.41%

Rs.50.00 crore

IIFL India Private Equity Fund

10,92,896

5.93%

Rs.40.00 crore

Ashoka India Opportunities Fund

10,92,880

5.93%

Rs.40.00 crore

ICICI Prudential Life Insurance

956,280

5.19%

Rs.35.00 crore

Sixteenth Street Asian Street Fund

956,280

5.19%

Rs.35.00 crore

Mirae Asset Midcap Fund

806,000

4.37%

Rs.29.50 crore

Carmignac Portfolio

546,400

2.96%

Rs.20.00 crore

Aberdeen Asia Smaller Comp Fund

546,400

2.96%

Rs.20.00 crore

Canara Robeco Small Cap Fund

546,400

2.96%

Rs.20.00 crore

Axis Balanced Advantage Fund

455,400

2.47%

Rs.16.67 crore

Axis Flexi Cap Fund

455,360

2.47%

Rs.16.67 crore

Axis Equity Hybrid Fund

455,360

2.47%

Rs.16.67 crore

Mirae Banking and FS Fund

410,000

2.22%

Rs.15.01 crore

Morgan Stanley Asia Singapore ODI

409,800

2.22%

Rs.15.00 crore

Nuvama Crossover Opportunities

397,181

2.15%

Rs.14.54 crore

Data Source: BSE Filings

While the GMP has remained tepid at around Rs8, it can be classified as a very subdued premium of 2-3% on listing. However, we have still seen very strong anchor response with the anchors taking in 45% of the total issue size. The QIB portion in the IPO will be reduced to the extent of the anchor placement done above. Only the balance amount will be available for QIB allocation as part of the regular IPO.

The general norm is that, in anchor placements, smaller issues find it hard to get FPIs interested while larger issues do not interest mutual funds. KFIN Technologies Ltd has been a mix, getting good response from FPIs, but it has also got extremely strong response from the domestic mutual funds and the domestic insurance companies, considering its product positioning in the Indian market. The number and spread of the Foreign Portfolio Investors has been fairly healthy in this case. With strong SIP flows, most equity funds are flush with cash at this point of time and that has helped the MF appetite for anchor allocation in this IPO of KFIN Technologies Ltd. Some of the major mutual funds to participate in the anchor allotment of KFIN Technologies Ltd included Nippon MF, Axis MF, Mirae MF and UTI MF.

Out of the total 1,84,42,623 shares allotted by way of anchor placement, KFIN Technologies Ltd allotted a total of 69,67,120 shares to 17 domestic mutual fund schemes across 8 AMCs. The mutual fund allocation represents 37.78% of the overall anchor allocation.


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