The offer for sale from Future Supply Chain Solutions Limited was subscribed 7.55 times. The company had offered for sale 97,84,570 equity shares in a price band of Rs 660-664. It had earlier allotted 29,35,370 equity shares to 13 anchor investors comprising of 16 entities. Five anchor investors were allotted an identical 3,46,236 equity shares or 11.80% of the anchor book.

The issue saw the QIB portion subscribed 12.36 times while the HNI portion was subscribed 11.15 times. Retail portion was subscribed 3.26 times. There were 4.40 lakh applications which saw the retail portion on basis of number of applications subscribed 2.83 times.

The issue received a better response than the hospital chain simply because some amount of interested party funding happened for the leveraged HNI. Assuming that the funding is done at 5.5% rate of interest, the cost would be about Rs 8 per share. This is an insignificant amount considering the issue price of Rs 664. It is important that the issue lists well.

The full details of the subscription category wise is given below.

Shalby Limited the super speciality hospital chain founded by Dr Vikram Shah was subscribed 2.82 times. The company had tapped the capital markets with its simultaneous issue to raise fresh equity of Rs 480 crs and an offer for sale of 10 lakh shares in a price band of Rs 245-248. The company had earlier allotted 60,70,150 equity shares to 11 anchor investors comprising of 13 entities. The highest allocation was done to Goldman Sachs who was allotted 9,67,740 shares which was 15.94% of the equity issue.

The issue received decent support and was subscribed 4.34 times by QIB’s. The HNI portion received lukewarm response and was undersubscribed at 0.42 times. The retail bucket was subscribed 2.98 times. A total of 3.19 lakh applications were received which made the issue in terms of applications subscribed 2.82 times.

The reason for the poor response from HNI’s was apparent as there was no way the HNI portion of the issue would be subscribed some 50-60 times or over. If that did not happen the margin on borrowing would not be the one or two percent but a hefty five or ten percent. No HNI wants to write a cheque of 25-50 crs for a 500 cr issue and hence there was no funding in the issue. This is despite the fact that the merchant bankers to the issue have their own NBFC’s and have lent money to the system. So much so that of the three merchant bankers, two are those with a large funding book.

This makes one conclude that the fundamentals of the issue are not enough for the leveraged HNI to subscribe. The greatest attraction for him is whether the same can be subscribed in triple digit and therefore get funded at margins of one percent or lower. It’s time the regulator takes a close look at the way funding happens.

Details of the subscription under various buckets is given below: –