InvestorQ : Can you tell me about the response to the anchor allocation of Dreamfolks IPO ahead of its opening today?
Anamika Sodhani made post

Can you tell me about the response to the anchor allocation of Dreamfolks IPO ahead of its opening today?

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Angel dcosta answered.
1 month ago
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Late on Tuesday, Dreamfolks Services Ltd, in consultation with the Book Running Lead Managers, closed the bidding and allocation for the anchor portion. It was a solid response to the issue from the anchors. Nearly 45% of the IPO size was absorbed by the anchors. It may be recollected that the issue opens on 24th August 2022 in the price band of Rs.308 to Rs.326 and the subscription will close on 26th August 2022, both days being inclusive. The anchor allocation saw good response from FPIs and also from domestic funds.

Under the new rules, Anchor shares are allocated to QIBs i.e. MFs, FPIs, sovereign funds, insurance companies etc. Originally the anchor allocation used to have a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. Anchor participation gives confidence to investors. The rule is that if the Offer Price discovered through book building is higher than the Anchor Investor Allocation Price, then anchor investors have to pay the difference immediately.

Let me now get to the details of the actual anchor allocation in terms of numbers. A total of 77,59,066 shares or 77.59 lakh shares were allotted to 18 anchor investors at the upper IPO price band of Rs.326. This took the total anchor portion to Rs.252.95 crore or 45% of the total issue size of Rs562.10 crore. Here is the list of top 5 anchor allocations where the absorption has been more than 7% of the overall issue size. These five anchor investors absorbed about 60% of the total anchor allocation by the company. Here is the list.

Anchor Investor

No. of Shares

% of Anchor Portion

Value Allocated

Small Cap World Fund Inc

22,08,598

28.46%

Rs.72.00 crore

Aditya Birla Sun Life Small Cap Fund

613,502

7.91%

Rs.20.00 crore

Aditya Birla Multi Cap Fund

613,456

7.91%

Rs.20.00 crore

Invesco India Multi Cap Fund

613,272

7.90%

Rs.19.99 crore

Sundaram Services Fund

613,272

7.90%

Rs.19.99 crore

Dreamfolks Services Ltd has been a mix, getting good response from FPIs and domestic mutual funds. While the Mutual funds accounted for one third of the anchor book response, the FPIs accounted for the balance two-third. The Small Cap World Fund of the Capital group alone absorbed nearly a quarter of the anchor book. A total of 26.97 lakh shares were allocated by Dreamfolks to 5 domestic mutual fund schemes across 4 AMCs representing 34.76% of the overall anchor allocation.

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