Tega Industries Limited which had tapped the capital markets with its offer for sale of 1,36,69,478 shares in a price band of Rs 443-453 received overwhelming support. The issue was subscribed 219.03 times. QIB portion was subscribed 215.45 times, HNI portion was subscribed 666.19 times and Retail portion was subscribed 29.44 times. There were 34.84 lac applications and on basis of lots the retail portion was subscribed 24.03 times.

The issue saw a new record level of subscription in the QIB portion and was the highest received in the decade. This beat the subscription received in HDFC AMC was at 196.26 times. The total subscription amount garnered by this issue was Rs 95,127 crs against an issue size of Rs 619.23 crs. The cost of funding is just under Rs 500 which means the share has to trade near the four-digit level if the leveraged HNI has to make money. This could be a tough task but one never knows.

Earlier the company had completed allocation to anchor investors. The issue had opened on Wednesday the 1st of December and closed on Friday the 3rd of December.

The company allotted 41,00,842 shares to 17 anchor investors comprising of 25 entities. Domestic mutual funds were allotted 25,77,661 shares to 8 entities. This comprised 62.86% of the anchor allocation.

The top allocation was made equally to two anchors, namely SBI Mutual Fund and Ashoka Fund who were allotted 5,73,936 shares or 14% of the anchor allocation. This was followed by an identical 7.54% or 3,09,045 shares to 7 anchor investors. This effectively meant that the top nine anchor investors were allotted 80.78% of the anchor book.

Full details of the subscription category wise are given below: –

Full details of the subscription are given below: –

Star Heath and Allied Insurance Company Limited which had tapped the capital markets with its fresh issue for Rs 2,000 crs and an offer for sale of 5,83,24,225 shares in a price band of Rs 870-900 saw tepid response and struggled in getting subscribed. At the end of the three-day subscription period, it could garner subscription to the extent of just 79% of the issue post anchor. It would now proceed to allot the shares based on the response received and reduce the shortfall in subscription by reducing the size of the offer for sale.

Earlier the company had completed allocation to anchor investors. The company allotted 3,57,45,901 equity shares to 49 entities comprising of 62 entities at the top end of the price band of Rs 900.

The highest allocation was made to Baillie Gifford Pacific Fund who was allotted 27,76,208 shares or 7.77% of the anchor book. This was followed by Monetary Authority of Singapore and Government of Singapore who were allotted 6.89% and 0.87% of the anchor book, making a total of 27,76,224 shares or 7.76% of the anchor book. This was followed by WF Asian Smaller Companies Fund who was allotted 27,30,992 shares or 7.64% of the anchor book. This was followed by Valiant who through three funds was allotted 24,82,928 share or 6.95% of the anchor book.

The top four anchor investors were allotted 1,07,66,352 shares or 30.12% of the anchor book. The surprising thing was that there was just one domestic fund, Edelweiss Mutual Fund who invested 1,65,376 shares or 0.46% of the anchor book. Very clearly the non-participation by domestic mutual funds whatever be their reason is a disturbing thing as they are the entity which is witnessing the maximum fund flow currently.

The issue would garner Rs 7,249 crs at the top end of the band. The issue had opened on Tuesday the 30th of November and closed on Thursday the 2nd of December.

The shortfall in issue subscription at the time of closing was 93.18 lac shares or about 11.6% of the issue size. It is important to note that the anchor portion subscribed fell short by about 4.99 lac shares of the 60% of the QIB portion. This compounded with the fact that the issue received poor response from HNI and even the employees of the company, means the company even after having a price band and poor response, will by force have to price the issue at the top end.

It defeats the very purpose of price discovery and SEBI needs to relook at the same. A dozen bankers who did extensive roadshows and took feedback based on demand, could not raise the required anchor book or make the issue sail through. What went wrong? Greed of the promoters of the company who felt that they in the present market conditions would be able to sell anything and at any price.

Time for reckoning and it would be interesting to see who dons the role of the saviour when the issue lists in about five days’ time.

Full details of the subscription are given below: –