The Rs 730-crore initial public offering of real estate developer Signature Global (India) was subscribed 11.88 times on September 22, the final day of bidding, with bids coming in for 13.36 crore equity shares against an issue size of 1.12 crore.
Retail investors bought 6.82 times their allotted quota of shares and high networth individuals 13.54 times. Ten percent of the IPO has been reserved for retail investors and 15 percent for HNIs.
The remaining 75 percent of the shares had been set aside for qualified institutional buyers (QIB), who are generally medium-to-long-term investors. Their portion was subscribed 12.71 times.
To sail through, all IPOs should to get at least 90 percent subscription in the QIB category.
The IPO, which opened on September 20, was subscribed 1.61 times on the second day of bidding.
The offer comprises a fresh issue of shares worth Rs 603 crore and an offer-for-sale of shares worth Rs 127 crore by the International Finance Corporation. The price band for the offer is Rs 366-385 a share.
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Signature Global, which has operations in the National Capital Region, will repay its and subsidiaries debt of Rs 432 crore from the fresh issue proceeds. As of June 30, the company had a debt of Rs 495.26 crore, while the borrowings by four subsidiaries stood at Rs 123.86 crore.
The remaining funds will be used for land acquisitions and general corporate purposes, the firm has said.
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The affordable and mid-segment housing-focused company has reported losses in the past financial years, though narrowed them in the year gone by.
The net loss for FY23 came in at Rs 63.7 crore, narrowed from loss of Rs 115.5 crore in FY22, but revenue jumped to Rs 1,553.6 crore from Rs 901.3 crore during the same period.
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The company will finalise the basis of allotment of IPO shares by September 27 and credit shares to the demat accounts of eligible investors by October 3. Refunds will be transferred to the bank accounts of unsuccessful investors by September 29.
The share will list on the BSE and NSE on October 4, as per IPO schedule, but that may change as recently four companies listed in accordance the SEBI’s new timeline of T+3.
The T+3 (IPO closing date + three days) timeline is voluntary for IPOs launched from September 1 but will be mandatory for offers opening from December 1, 2023.
Signature Global shares were available at a 9 percent premium over its upper price band in the grey market, analysts said on condition of anonymity. The grey market is an unofficial trading platform for IPO shares which can be bought and sold till the listing.
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