Mindspace Business Parks Reit (Mindspace) which is tapping the markets to raise Rs 1,000crs through a fresh issue and Rs 3,500 crs through an offer for sale, completed allocation to anchor investors. The REIT allotted 552.272 lac units at Rs 275 to 54 investor’s worth Rs 1,518.7 crs. The highest allocation was made to Government of Singapore who was allotted 66,75,200 units worth Rs 183.57 crs. This formed 12.09% of the anchor allocation.

The issue opens for subscription on Monday the 27t of July and closes on Wednesday 29th July. The price band is Rs 274-275. 75% of the issue is reserved for institutional bidders and 25% for non-institutional bidders. Post the allocation to strategic investors of Rs 1,125 crs the size of the offering would be reduced to Rs 3,375 crs with QIB portion Rs 2,531 crs and non-institutional portion Rs 843.75crs. With the anchor allocation completed, the QIB portion would be reduced to Rs 1,012.25crs.

The net asset value of the units as on 31st March 2020 was Rs 319.50, which effectively means that the selling price at the top end of the band is a discount of 13.9%. The units are expected to earn a yield of 7% in the current year rising hereon to be effectively 7.5% in the next year. The return would be distributed in the form of dividend to the extent of 90% and the balance in the form of interest. The dividend would be tax free in the hands of the investor and there would be no tax paid by the individual as part of his income as they are exempt under section 10(23 FD). SEBI has been encouraging the participation of small investors in these instruments which come under the head of INVITS and REITS, by reducing the ticket size periodically. The ticket size began at Rs 10 lacs, was reduced to Rs 5 lacs and then to Rs 2 lacs and finally to Rs 50,000. Considering the fact that the allocation in the issue from Mind Space consists of just two buckets namely Institution and non-institution, pairing HNI with Retail is most unfair and goes against the very spirit of encouraging small investors. The allocation would be pro-rata and this would ensure that retail applicants are butchered in allotment as happened in the shareholder quota of SBI Cards Issue. Here the allocation was extremely skewed and caused huge heartburn. SEBI would be well advised to ensure equitable distribution, like is done in equity issues where one lot is first given to all applicants and the balance then distributed on a pro rata basis.

The full list of anchor investors with the allocation is given below: –

Shares of Rossari Biotech Limited which had tapped the capital markets with its simultaneous fresh issue of Rs 50 crs and an offer for sale of 1.05 shares had a dream debut on listing. The company which had sold its shares at Rs 425 saw its shares touch Rs 804 on BSE and close at Rs 742.35, a gain of Rs 317.35 or 74.67%.

Earlier the company had completed its allocation to anchor investors by allotting 35.02 lac shares to 15 anchor investors comprising of 29 entities. The highest allocation of 3,29,420 shares was made to three individual investors which constituted 9.4% of the anchor allocation and was made to Ashoka India, Nalanda Fund and Nippon India. Besides the above, three mutual funds HDFC, ICICI and SBI were also allotted the similar 9.4% in various schemes. The price band was Rs 423-425. The issue had opened on Monday the 13th of July and closed on Wednesday the 15th of July. The issue was subscribed 79.37 times. The QIB portion was subscribed 85.26 times, HNI portion 239.83 times and Retail portion was subscribed 7.23 times. The cost of funding for the leveraged investor worked out to Rs 127-137.

Shares opened at Rs 670 on BSE and Rs 669.25 on NSE. The high of the day was Rs 804 on BSE and Rs 803.10 on NSE. The low was Rs 663.55 and Rs 664 respectively. The closing price was Rs 742.35, a gain of Rs 317.35 or 74.67% on BSE. It was Rs 316.65 or 74.51% on NSE. The traded volume on the two exchanges combined was 338.68 lacs which was 3.32 times the IPO size of 116.76 lac shares and 4.75 timed the non-anchor size. Delivery volume was 75.74 lac shares which was 19.52% of the traded volume but 64.87% of the IPOsize and an unprecedented 92.68% of the non-anchor portion. The last time we had such a high delivery percentage was in the case of a manipulated stock of Fineotex Chemicals which was listed in March 2011. That time the delivery percentage as a basis of the issue size was more than 100%.

The weighted average of the day’s trade was Rs 723.53 on BSE and Rs 722.81 on NSE. In terms of institutional activity, Plutus Wealth Management Limited LLP bought a net of Rs 4,77637 shares at Rs 669.25, which was the pre-discovery price at NSE. Similarly, Goldman Sachs bought 4,81,443 shares at Rs 692.17. With 92.68% or 75.74 lac shares changing hands, the investors in the company now are all around Rs 700 and this would become a new norm. Investors would make or lose money if price rises or falls from these levels. Making money looks difficult currently and the share is likely to see pressure going forward.

In conclusion share on listing day has fared far better than what was expected. Bring the first virtual issue, virtual listing and issue during covid-19, a new benchmark has been set.