InvestorQ : How was the final response to the IPO of Fusion Micro Finance which closed on Friday 04th November 2022?
Rutuja Nigam made post

How was the final response to the IPO of Fusion Micro Finance which closed on Friday 04th November 2022?

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4 weeks ago
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The IPO of Fusion Micro Finance to raise Rs1,104 crore saw fairly tepid response on Day-1 and Day-2 of the IPO and closed with relatively disappointing numbers on Day-3. If even got fully subscribed only around mid-day on the last day of the IPO. As of close of 04th November 2022, out of the available quota of 213.76 lakh shares on offer, Fusion Micro Finance Ltd got valid bids for 630.36 lakh shares. That translates into a rather tepid overall subscription of 2.95 times only. The break-up of subscriptions was largely tilted in favour of the QIB investors while the HNI / NII portion got just about subscribed. Incidentally, the retail portion was undersubscribed as of the close of the IPO on Friday.

Let me start with the QIB portion first and foremost. We must begin with the rather successful anchor placement of 89,99,943 shares at the upper end of the price band of Rs.368 on 01-November, a day prior to the IPO opening. The company raised Rs331.20 crore from 17 anchor investors; including names like Nomura, Massachusetts Institute of Technology, BNP Paribas, ICICI Prudential Mutual Fund, Bajaj Allianz Life etc. The QIB portion had a quota of 59.56 lakh shares (net of anchor portion), of which it got valid bids for 511.53 lakh shares by close. That translates into QIB subscription of 8.59 times.

If the QIB portion was impressive, the HNI / NII portion just about scraped through getting applications for 63.63 lakh shares against the quota of 46.26 lakh shares. The HNI / NII portion was subscribed 1.38 times overall. You can classify that as a rather tepid performance with most of the funding clients and corporates clients now showing up on the last day. Now, the HNI portion is broker into 2 parts. The above Rs10 lakh bid category (B-HNIs) got subscribed 1.52 times while the below Rs10 lakh bid category (S-HNIs) got subscribed 1.09X. Overall, it was a tepid performance by HNIs / NIIs in the IPO.

Finally, we come to the retail portion. The weak appetite combined with the 35% allocation to retail meant that there were just not enough bidders in the retail category. In the retail investor category, out of the 107.93 lakh shares on offer, valid bids were received for only 55.21 lakh shares. That translates into 0.51 times subscription only. That would mean that the unsubscribed portion would be offered to the other segments to fill up. The IPO has closed for subscription as of the close of Friday, 04th November 2022.

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