Mangalam Alloys IPO Final Subscription Status

Mangalam Alloys IPO Final Subscription Status
Mangalam Alloys IPO Final Subscription Status

by Tanushree Jaiswal Last Updated: Sep 26, 2023 - 02:53 pm 464 Views
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Mangalam Alloys IPO closed on Monday, 25th September 2023. The IPO had opened for subscription on 21st September 2023. Let us look at the final subscription status of Mangalam Alloys Ltd at the close of subscription on 25th September 2023. The price for the fixed price IPO was ₹80 per share and the stock has a face value of ₹10 per share.

About the Mangalam Alloys Ltd IPO

As part of the fresh portion of the IPO, Mangalam Alloys IPO will issue a total of 61,26,400 shares (61.26 lakh shares approximately), which at the fixed IPO price of ₹80 per share aggregates to a total fresh fund raising of ₹49.01 crore. As part of the offer for sale (OFS) portion of the IPO, there will be a sale of 7,37,600 shares (7.38 lakh shares approximately), which at the fixed IPO price of ₹80 per share aggregates to a total OFS size of ₹5.90 crore. Therefore, the total IPO size of the Mangalam Alloys Ltd issue will be of 68,64,000 shares (68.64 lakh shares), which at the fixed IPO price of ₹80 per share aggregates to a total fresh fund raising of ₹54.91 crore.

The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹128,000 (1,600 x ₹80 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 ₹256,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

Application

Lots

Shares

Amount

Retail (Min)

1

1,600

₹1,28,000

Retail (Max)

1

1,600

₹1,28,000

HNI (Min)

2

3,200

₹2,56,000

Final subscription status of Mangalam Alloys IPO

Here is the subscription status of the Mangalam Alloys Ltd IPO as at close on 25th September 2023.

Investor
Category

Subscription
(times)

Shares
Offered

Shares
bid for

Total Amount
(₹ Cr.)

Market Maker

1

3,44,000

3,44,000

2.75

HNI / NIIs

2.41

32,59,200

78,48,000

62.78

Retail Investors

8.73

32,60,800

2,84,51,200

227.61

Total

5.57

65,20,000

3,63,15,200

290.52

The issue was open for retail investors and for the non-retail investors; which hare predominantly the HNI / NII category and to a lesser extent the corporates and the institutions. There was a broad quota designed for each of the segments and 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 3,44,000 shares were allocated as market maker portion to Rikhav Securities 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.

Anchor Investor Shares Offered

Nil Shares

Market Maker Shares Offered

3,44,000 Shares (5.01%)

Other Shares Offered

32,59,200 Shares (47.48%)

Retail Shares Offered

32,60,800 Shares (47.51%)

Total Shares Offered

68.64,000 Shares (100.00%)

As can be seen, from the above table, the company had not allocated any shares for the anchor investors and did not have any dedicated QIB quota in the IPO. The only allocation made was the 5.01% allocation to the market maker to provide liquidity on the counter. The net offer to the public (net of market maker inventory) was distributed between the retail investors and the non-retail investors.

How subscription built up for the Mangalam Alloys IPO

The oversubscription of the IPO was dominated by the retail investors followed by the HNI / NIIs in that order. The table below captures the day-wise progression of the subscription status of Mangalam Alloys Ltd IPO.

Date

NII

Retail

Total

Day 1 (Sep 21, 2023)

0.56

1.31

0.93

Day 2 (Sep 22, 2023)

0.90

3.77

2.34

Day 3 (Sep 25, 2023)

2.41

8.73

5.57

It is clear from the above table that while the retail portion got fully subscribed on the first day of the IPO itself, the HNI / NII portion got fully subscribed only on the second day of the IPO. As a result, the overall IPO also got fully subscribed only on the second day of the IPO. Both the retail and the non-retail portion saw good traction on the last day, although at 5.57 times, the subscription was much below the median of SME IPOs. There is an allocation of 3,44,000 shares to Rikhav Securities Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

Here are the key dates relevant for the Mangalam Alloys IPO

Event

Indicative Date

IPO Opening Date

September 21st, 2023

IPO Closing Date

September 25th, 2023

Finalization of Basis of Allotment

September 28th, 2023

Initiation of Refunds to non-allottees

September 29th, 2023

Credit of Shares to Demat account of eligible investors

October 03rd, 2023

Date of listing on the NSE-SME IPO segment

October 04th, 2023

The IPO of Mangalam Alloys will get listed in the NSE SME segment, which is the segment on which the NSE incubates the listed start-ups.

A quick word on Mangalam Alloys Ltd and the SME IPO

Mangalam Alloys Ltd was incorporated in the year 1988 and is a key manufacturer of stainless-steel-based products. In terms of its product portfolio, Mangalam Alloys Ltd manufactures SS Ingots, SS Black Bar, SS RCS, SS Bright Round Bar, Bright Hex Bar, Bright Square Bar, Angle, Patti, Forgings etc. The company manufactures fasteners in more than 30 international grades and in the size range from 3 mm to 400 mm. Typically, Mangalam Alloys Ltd makes stainless steel ingots through 3 furnaces by melting stainless steel scrap, rolling ingots to stainless steel rounds & flats followed by heat treatment annealing. The manufacturing facility of Mangalam Alloys is spread across an area of 40,000 square metres (SQM) with an existing installed melting capacity of 25,000 tonnes per annum (TPA). The revenues of the company have shown steady and secular growth over the last 3 years.

The company has been promoted by Uttam Chand Mehta and Tushar Mehta. With the IPO being a combination of fresh issue and offer for sale, the promoter stake will get diluted post the IPO. The fresh issue funds will be used by the company for meeting its working capital funding gaps and for capex for business expansion and R&D. Part of the monies raised will also go towards general corporate expenses. While Expert Global Consultants Private Ltd will be the lead manager to the issue, Skyline Financial Services Private Ltd will be the registrar to the issue. The market maker for the issue is yet to be announced.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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