The fresh issue from Quess Corp Limited which closed on Friday received excellent response from all segments and was oversubscribed a massive 144.50 times. Earlier the company had allotted 73.48 lac shares to 25 anchor investors comprising of 44 entities. The issue was in a price band of Rs 310-317 and was to raise Rs 400 crs. The allocation was 75% for QIB’s, 15% for HNI’s and 10% for retail.

The QIB portion was subscribed 59 times while the HNI portion was subscribed 392 times. The demand generated for the issue from HNI’s amounts to Rs 23,520 crs or almost 59 times the IPO size of Rs 400 crs. The rate of interest in the previous issue was 8% and it appears many of the HNI’s have been able to renegotiate the same to between 6.5%-7%. The interest cost per time at 7% works out to Rs 166 per share while at 8% the same works out to Rs 190. Currently the grey market premium justifies the 7% rate while leveraged investors borrowed at 8% are currently out of pocket.

The detailed subscription is given below:-

The number of applications received in the issue is 7,30,183 which means that on the basis of applications the retail portion is subscribed 26.04 times.

Shares of Mahanagar Gas Limited listed on the bourses and made a great start. The offer for sale of 246.94 lac shares had received excellent response and the HNI portion was subscribed 191 times. The allotment price was Rs 421. The shares had a discovered price of Rs 540 which was marginally short of the leveraged HNI investor whose cost was Rs 421+123=544. The high of the day was made immediately after trading began at Rs 549 and thereafter the share price fell slowly but surely. The trading range thereafter was between Rs 328-335 not allowing the leveraged investor to recover his cost.

The scrip saw decent volumes of 238.12 lac shares which is almost equal to the issue size. The delivery volume was 84.45 lac shares which was 35.45% of the traded volume and 34.18% of the issue size. If one looks at it another way and reduces the number of shares allotted to anchor investors who have a lock in for 30 days, the delivery percentage increases to 48.66%. There are no names of either people buying or selling the share in the bulk trades category which implies that no investor has traded half percentage of the company’s equity on day one. This also indicates that there was selling pressure on the share from the leveraged investor who was out of pocket. The selling pressure should subside over the next three to four days and buying could emerge thereafter.

TABLE TO BE APPENDED

From the table above one can see that the weighted average of the day’s trade was Rs 531.82 on the BSE and marginally higher at Rs 532.46 on the NSE. Even at this price the HNI has lost between Rs 11-12 per share. One wonders whether there is a new breed of investors who have come to apply with leveraged funds or there is surplus liquidity available for lending. Until the balance is restored the possibility of this category overbidding each time and losing money is quite likely. Retail Investors who were largely allotted shares in one out of four would be more than happy making about 25% return. Very clearly good value for money and all are happy.