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.
Existing 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|
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.