This week was one of the busiest weeks in recent years for the primary market, with five mainboard IPOs - IREDA, Tata Technologies, Flair Writing, Fedbank Financial Services, and Gandhar Oil Refinery India - raising a total of 7,377 crore. The week began with the state-owned Indian Renewable Energy Development Agency's (IREDA) 2,150.21-crore initial public offering (IPO), which opened for subscription on November 21, 2023, and was followed by the remaining four on November 22.
The most notable characteristic was that all IPOs were oversubscribed, with companies such as Tata Tech, Gandhar Oil, and IREDA obtaining tremendous reactions from all types of investors, particularly institutional investors. The high desire for shares across sectors reflects investors' growing confidence in India's growth story and appeal as an investment destination.
The large participation was further boosted by the capital market regulator SEBI's recent decision to switch from the T+6 to T+3 listing format, which allows investors to obtain early credit and liquidity for their investments. Because of the faster listing timeline, investors can study and participate in more IPOs that are opening concurrently.
The following are the final subscription updates for all five IPOs.
Tata Consultancy Services
Tata Technologies' highly anticipated IPO of 3,042.51 crore, the group firm's first offering in over two decades, surpassed many records, reaffirming investors' trust in the brand "Tata." The offering was entirely made by existing shareholders at a price range of $475-500 per share, with a lot size of 30 shares.
The IPO, which was the third-largest in terms of issue amount in 2023, set a record for attracting the most applications on its issuance, surpassing LIC of India, Reliance Power, Glenmark Life Sciences, SBI Life Insurance, Zomato, and Nykaa, among others. Tata Tech shattered the LIC of India's record of 73.38 lakh applications on the final day of its issuance, becoming the country's largest-ever IPO after Paytm, which arrived in May 2022.
On the final day of bidding on November 24, the public issue of Tata Tech, a subsidiary of Tata Motors, was subscribed 69.43 times, with the quota allocated for qualified institutional buyers (QIBs) being subscribed a record 203.41 times. Non-institutional investors (NIIs) and retail investors were booked 62.11 times and 16.50 times, respectively, while shareholders and employees were subscribed 29.19 and 3.70 times, respectively.
India's Gandhar Oil Refinery
Despite significant demand for Tata Tech shares, the IPO of a specialist oil and lubricant company received a positive response from investors. The shares were offered at a price range of 160-169 per share, with a lot size of 88 shares and up.
On the final day of bidding, the 500 crore public issue of the major maker of white oils was subscribed 64.07 times, driven by qualified institutional purchasers, who got 129 offers on the quota reserved for them. The share reserved for high-net-worth persons was subscribed 62.2 times, while retail investors were subscribed to 28.95 times.
IREDA
The PSU company's 2,150-crore IPO, the first by a government-owned business since LIC in May last year, received a strong response from investors.
On November 23, the final day of bidding, investors offered for 1,827 crore equity shares against an offer size of 47.09 crore. Quotas were booked 104.57 times for QIBs, 24.16 times for NIIs, and 7.73 times for retail investors, respectively. The Mini-Ratna PSU received 9.8 times bids for the 18.75 lakh shares set aside for its employees.
Writing with Flair
The pen maker's 593 crore public offering was similarly well greeted by investors, with the issue being subscribed 46.8 times on the last day of its IPO. The offer, with a price range of $288 to 304 per share, was bid on 122 times by QIBs, while the portion earmarked for NIIs and retail investors was bid on 35.2 times and 13.7 times, respectively.
Federal Reserve Bank Financial Services
On the final day of bidding, November 24, the public offering of a retail-focused non-banking financing company (NBFC) launched by Federal Bank was subscribed 2.2 times. The QIB category of the 1,092 crore IPO, which was offered at a price band of 133 to 140 per equity share, received the most subscriptions (3.48 times), followed by the institutional component (1.49 times). The employment quota was subscribed 1.88 times.
