HDFC Standard Life Insurance company Limited which is tapping the capital markets with its offer for sale of 29,98,27,818 equity shares in a price band of Rs 275-290 completed allocation to anchor investors. The company allocated 8,00,68,600 equity shares to 89 anchor investors comprising of 126 entities.
The list includes who’s who and is exhaustive in nature. It does indicate that the demand what huge for allocation. It could also be assumed that there should be spill over of the same into the QIB book as well.

The highest allocation was made to UC-RNT fund which was allotted 32,75,850 or 4.0915 of the anchor allocation.

The issue has opened and would close on Thursday the 9th of November. The full list of anchor investors is given below:-

Shares of Reliance Nippon Life Asset Management Limited listed on the bourses and registered gains of 12.70%. Earlier the company had sold 6.12 cr shares through an offer for sale in a price band of Rs 247-252. The company had allotted 1,83,60,000 shares to 35 anchor investors.
The highest allocation was made to BNP Paribas Arbitrage fund of 20.63 lakhs which amounts to 11.24% of the anchor allotment.

The issue was very well received and was oversubscribed 81 times. The QIB portion was subscribed 118.40 times, HNI 209.44 times and retail portion 5.65 times. There were 16.37 lakh applications. The cost of funding for the leveraged HNI was Rs 55.67 per share.

The issue opened at Rs 294 on the BSE and Rs 295.90 on the NSE. The high was Rs 298.70 and Rs 299 respectively. The low was Rs 278 on both the exchanges. The close on BSE was Rs 284, a gain of Rs 32 or 12.70%. On the NSE the close was Rs 284.40, a gain of Rs 32.40 or 12.86%.

The traded volume was 495.02 lakhs which was 80.89% of the IPO size of 6.12 cr shares. Delivery volume was 248.94 lakh shares which was 50.29% of the traded volume and 40.68% of the IPO size. Considering that anchor investors have a lock-in for thirty days, on a non-anchor basis the delivery percentage was 58.11%. The weighted average was Rs 288.46 on the BSE and Rs 289.50 on the NSE.

Considering the fact that the closing price was below the weighted average, we take this weighted average as the price at which HNI’s would have sold. The cost of interest per share was Rs 55.67. The average selling price was Rs 289.50 or Rs 37.50 more than the issue price. Reducing the same from the cost of funding it means a loss of Rs 18.17 per share. A leveraged investor who put in an application for Rs 100 crs would have been allotted 18,947 shares and would have lost Rs 3,44,266 per Rs 100 crs. His investment incidentally would have been Rs 1 cr towards margin and the upfront interest that he would have paid.

While retail investors who were lucky to have been allotted shares made money, yet again those who borrowed and applied lost money. The case in point is that this category is creating hype, distorting demand and destroying shareholders wealth. To add insult to injury they divest within 24 hours of listing.