The simultaneous offer from Varun Beverages Limited was subscribed. The company had tapped the capital markets with its fresh issue of 1.5 cr shares and an offer for sale of 1 cr shares in a price band of Rs 440-445. The issue was subscribed 1.86 times with 3 out of four categories remaining undersubscribed. Only the QIB portion was subscribed while HNI, Retail and Employee remained undersubscribed. If one tries to recall IPO’s this year there is hardly any other IPO which has had such a poor showing.

Some market players are comparing this issue with Manpasand Beverages Limited which had tapped the capital markets in July 2015. The issue was subscribed 1.40 times with QIB portion subscribed 1.98 times, HNI 0.38 and retail 1.16 times. This was an issue where reservation for QIB was 75, 15 for HNI and 10 for Retail. The share has not looked back thereafter.

The major difference in the two issues are primarily the fact that Manpasand has a brand “Mango Sip” while Varun is a bottler for Pepsico. Secondly while Manpasand sells fruit juice. India loves mango and Manpasand is a mango juice company having its own brand, manufacturing and distributing setup. I believe comparing the two companies is just not worth the exercise.

The full list of subscription category wise s appended below:-

Very clearly the subscription to this issue was disappointing and coming at a time when activity in the primary market is virtually at its peak does not augur well. One hopes that merchant bankers realise that HNI’s and Retail comprise half the subscription in an issue and their opinion matters.

Happy Diwali.