QIBs swoop in to save the day: India's biggest ever IPO fully subscribed!
Oct 17, 2024, 15:00 IST
India's biggest IPO to date, Hyundai Motor India's offer worth Rs 27,870.16 crore was fully subscribed today i.e. the last day of subscription. The issue, which opened on October 15th, 2024, was subscribed to a total of 2.12 times, with QIBs making a mad, last-minute dash for the IPO, subscribing to it by over 6 times.
Retail participation in Hyundai Motors India's IPO remained largely subdued, with investors only subscribing to 45% of the shares earmarked for them. As against 4.94 crore shares which were allocated for them, investors only bid for 2.23 crore shares.
QIBs (Qualified Institutional Buyers), who had been offered about 19.89% of the total issue pie, ended up with oversubscribing to the issue by a massive 6.32x. QIBs bid for 17,86,65,739 shares, as against 2,82,83,260 shares allocated for them.
QIBs are generally large financial institutions such as mutual funds, AIFs (alternative investment funds), venture capital funds, commercial banks, insurance companies and pension funds. Note that a provisional fund, or a pension fund would need a minimum of Rs 25 crore as its corpus, in order to identify as a QIB.
What sets anchor investors, who generally bid for an IPO a day before the subscription is set to start, from QIBs is their bid amount. Anchor investors are also QIBs, who are mandated to bid for a minimum of Rs 1o crore worth of shares in an IPO.
Hyundai Motor India's employees, who were offered the share at a discount of Rs 186, and also 0.55% of the total stake, were another segment that received the IPO positively. The IPO was subscribed 1.65x in this category, with employees bidding for 12,81,343 shares as against 7,78,400 shares reserved for them.
SEBI regulations mandate that except for retail investors, no other category of IPO bidders cannot cancel or modify the bids they've once placed. QIBs and NIIs can only increase their bid quantity or price, and have no way of downsizing or cancelling the bids once placed.
Unlike anchor investors, who have a 30-day lock-in period before selling off 50% of their allotted shares and another 90-day lock-in period before selling the rest, QIBs can begin selling their shares as soon the stock is listed on the exchanges, and begins trading.
The share allotment for this IPO is expected to be done by October 18th, with the listing on BSE and NSE tentatively set for October 22. According to recent trends, the company's GMP (grey market premium) was trading at Rs 15, bringing its potential listing price to Rs 1,975, and the expected listing gains to a mere 0.77%.
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Retail participation in Hyundai Motors India's IPO remained largely subdued, with investors only subscribing to 45% of the shares earmarked for them. As against 4.94 crore shares which were allocated for them, investors only bid for 2.23 crore shares.
QIBs (Qualified Institutional Buyers), who had been offered about 19.89% of the total issue pie, ended up with oversubscribing to the issue by a massive 6.32x. QIBs bid for 17,86,65,739 shares, as against 2,82,83,260 shares allocated for them.
QIBs are generally large financial institutions such as mutual funds, AIFs (alternative investment funds), venture capital funds, commercial banks, insurance companies and pension funds. Note that a provisional fund, or a pension fund would need a minimum of Rs 25 crore as its corpus, in order to identify as a QIB.
What sets anchor investors, who generally bid for an IPO a day before the subscription is set to start, from QIBs is their bid amount. Anchor investors are also QIBs, who are mandated to bid for a minimum of Rs 1o crore worth of shares in an IPO.
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SEBI regulations mandate that except for retail investors, no other category of IPO bidders cannot cancel or modify the bids they've once placed. QIBs and NIIs can only increase their bid quantity or price, and have no way of downsizing or cancelling the bids once placed.
Unlike anchor investors, who have a 30-day lock-in period before selling off 50% of their allotted shares and another 90-day lock-in period before selling the rest, QIBs can begin selling their shares as soon the stock is listed on the exchanges, and begins trading.
The share allotment for this IPO is expected to be done by October 18th, with the listing on BSE and NSE tentatively set for October 22. According to recent trends, the company's GMP (grey market premium) was trading at Rs 15, bringing its potential listing price to Rs 1,975, and the expected listing gains to a mere 0.77%.