InvestorQ : What was the final subscription update in the case of the IPO of Archean Chemical Industries IPO?
Crowny Pinto made post

What was the final subscription update in the case of the IPO of Archean Chemical Industries IPO?

3 weeks ago

The Archean Chemical Industries IPO comprised of a fresh issue of Rs805 crore and offer for sales by the promoters and early shareholders worth Rs657.31 crore. The IPO saw tepid response on Day-1 and Day-2 of the IPO but turned around on the third day and managed to close with healthy subscription numbers. Peak demand came from the QIB segment, followed by the HNI / NII segment and retail segment in that order. Out of the 199.57 lakh shares on offer in the IPO, Archean Chemicals got bids for 6,431.71 lakh shares. This implies an overall subscription of 32.23 times, which is fairly healthy, dominated by QIBs.

Let me first touch upon the QIB portion of the IPO. On 07th November, Archean Chemical Industries did an anchor placement of 1,61,67,991 shares at upper price band of Rs.407 to a total of 42 anchor investors worth Rs658.03 crore. Anchor include big names like Goldman Sachs, Ashoka, Norwegian Pension Fund, Segantii etc. QIB portion had a total quota of 107.06 lakh shares net of the above anchor allocation. For this issue, it got QIB bids for 5,235.91 lakh shares at the close of Day-3, implying 48.91 times subscription. QIB bids typically get bunched on the last day and that was evident in this IPO too.

Now for the HNI or non-institutional portion. The HNI portion got subscribed 14.90 times as it got bids for 827.21 lakh shares against the available quota of 55.51 lakh shares. That is a rather steady response at close of Day-3, with the last day driving most of the demand. That is the norm in the HNI portion. The above Rs10 lakh bid category (B-HNI) got subscribed 16.90X while the below Rs10 lakh bid category (S-HNIs) got subscribed 10.92X. Normally, HNI flows on the last day are driven by corporate application and by the funding applications. Both were there, but only to a much smaller extent in this IPO.

Finally, we come to the retail portion of the IPO which was subscribed 9.96X at the close of Day-3. It must be noted that retail allocation had been restricted to just 10% in this IPO since 70% was reserved for the QIB investors. In the case of retail investors; out of the 37.01 lakh shares on offer, valid bids were received for 368.59 lakh shares. That translates into 9.96 times subscription in retail quota. This included bids worth about 314.73 lakh shares at the cut-off price. The IPO was priced in the band of Rs.386 to Rs.407 and the IPO has closed for subscription as of the close of Friday, 11th November 2022.