Sadbhav Infrastructure IPO subscribed 2.2 times on final day

Despite continued weakness in the secondary market, Sadbhav Infrastructure IPO was fully subscribed on the final day of bidding. The IPO of the Ahmedabad-based infrastructure player received bids for 6.41 crore shares against the net issue of 2.85 crore shares, according to data available from NSE and BSE at 7 PM. The subsidiary of Sadbhav Engineering was aiming to mobilize funds between INR489.71 crore and 491.65 crore through the IPO which was priced in a range of INR100  – 103 per share.

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Sadbhav InfrastructureExisting investors Norwest Venture Partners and Xander Investment Holding offered 32.35 lakh shares each in the IPO while the company raised INR425 crore through issue of fresh shares. Earlier, the road infrastructure player roped in anchor investors which played an important role in easing concerns about the volatile secondary market.

Subscription was driven by the Qualified Institutional Buyer (QIB) category which attracted bids for 4.4 crore shares, leading to a subscription of 3 times. Participation from the Non Institutional Investor (NII) category was lower but the category was still subscribed 1.7 times as high networth investors (HNIs) placed orders for 1.15 crore shares. A similar 1.7 times subscription was seen in the Retail Individual Investor (RII) category which received bids for 78.14 lakh shares. Employee category, which had a total of 25 lakh shares, was subscribed only 0.3 times.

Sadbhav Infrastructure’s IPO Bidding (as on 2 September 2015, 7 PM)

Sr.No. Category No. of shares offered No. of shares bid for % subscription
1 Qualified Institutional Buyers (QIBs) 14465730 44012720 3.0
2 Non Institutional Investors 6970728 11580425 1.7
3 Retail Individual Investors (RIIs) 4647152 7814050 1.7
4 Employee 2500000 723985 0.3
Total 28583610 64131180 2.2

Read Also: Sadbhav Infrastructure IPO price band revealed amid market mayhem

Sadbhav Infrastructure’s success comes just a day after poor response to Prabhat Dairy IPO which was extended apart from a price range revision. Looking back, the success of Sadbhav Infrastructure comes partly from the fact that only 10% of the issue was reserved for retail investors. Small investors are usually the worst affected by weak market conditions and higher reservation to the category in extreme market conditions is a recipe for disaster.

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Vipin Mathur

By working in multiple cultures and segments of various organizations, Vipin has earned 15 years of experience in managing and organizing different operations. Most recently, he is associated with IPO Central as CEO. At IPO Central, he plays a leading role in management and operational practices. He also guides authors and researchers about the latest trends and news of upcoming IPOs.

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