SRS Limited which had tapped the capital markets with its IPO in a price band of Rs 58-65 was subscribed. The issue was for 3.5 cr shares and had opened for subscription on the 23rd of August and closed on Friday the 26th of August. The issue received support from HNI’s and this support helped the issue to get subscribed. The response from them was 5.11 times their portion. The QIB portion was subscribed 75% and the retail a mere 32%. The asking price was expensive and the secondary markets during the time that the issue was open turned very negative and fell sharply. The overall issue was subscribed 1.25 times.

The details of the subscription level in various categories are given below: –

Looking at the subscription and the price bids made it appears that the issue would be priced at the lower end of the price band at Rs 58. It may be said that the present market scenario was not the ideal one to raise resources and the QIB subscription is indeed creditable as it appears to be from domestic mutual funds and banks showing the confidence in the management. The poor subscription from retail is based on the poor perception of investors about the secondary market considering that we have even broken the 16,000 mark and there seems to be very little hope of immediate recovery.

It would be important for the company to deliver on its performance post listing and ensure that the net margins show the necessary improvement going forward.