Updater Services IPO subscribed 2.9 times on final day, retail portion booked 1.38 times

Updater Services IPO closes today

The initial public offering (IPO) of business support services company Updater Services has been subscribed 2.9 times with bids coming in for 3.47 crore equity shares against 1.2 crore shares.

Retail investors have picked 1.38 times shares against their allotted quota, while the portion reserved for high networth individuals was subscribed 85 percent.

Qualified institutional buyers (QIB), who are very important for every book built issue, have bought 4.48 times the part set aside for them. For any issue to sail through, they have to subscribe for at least 90 percent shares of their portion.

The intergrated facility management services company has reserved 75 percent of the offer size for qualified institutional buyers, 15 percent for high networth individuals and the remaining 10 percent for retail investors.

The issue, which opened on September 25, was subscribed 16 percent till the second day of bidding.

Updater Services aims to raise Rs 640 crore via maiden public issue at the upper price band. The offer consists of a fresh issuance of shares worth Rs 400 crore, and an offer-for-sale of Rs 240 crore by selling shareholders including promoter Tangi Facility Solutions.

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Of the said issue size, anchor investors, who are part of QIB, have invested Rs 288 crore in the company on September 22. Citigroup, Societe Generale, Copthall Mauritius Investment, Nomura Singapore, BNP Paribas Arbitrage, Franklin India, ICICI Prudential Mutual Fund, and Aditya Birla Sun Life Insurance are some of anchor investors participated in the book.

Of the net fresh issue proceeds, the company will make use of Rs 133 crore for debt reduction, and Rs 115 crore for working capital requirements. Further, the inorganic initiatives at a cost of Rs 80 crore will also be done via fresh issue money. And the remaining funds will be used for general corporate purposes.

The price band for the offer is Rs 280-300 per share, while its post issue market capitalisation at the upper price band comes to Rs 2,001 crore.

As per the IPO schedule, Updater Services will finalise the basis of allotment of IPO shares by the end of October 4, and the equity shares will be credited to demat accounts of successful investors by October 6.

The trading in its equity shares will commence with effect from October 9, which may be changed if the company, later on, considers T+3 timeline for listing.

Currently, its listing schedule fits into the old T+6 timeline (Issue closing date + six working days). Till November 30th this year, companies launching public issues since the September 1 can voluntarily go for T+3 timeline for listing, while the same will be mandatory for all IPOs opening with effect from December 1, 2023.

In the grey market, too, Updater Services shares seem to less active, quoting at just 1-2 percent premium over the upper price band, analysts said on anonymity. The grey market is an unofficial platform wherein the IPO shares can be bought and sold till the listing.