Clean Max joins rare group of IPOs listing without full subscription, first in four years

Clean Max breaks four-year streak as sub-100% subscribed IPO heads to listing.

• Clean Max to list despite IPO not fully subscribed at 99 percent
• First such listing since Star Health's IPO in December 2021
• Most under-subscribed IPOs saw weak returns post listing

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Despite Clean Max Enviro Energy Solution's issue falling short of full subscription, the firm will be listed on March 2, making it the first issue in four years to hit the markets without touching 100% subscription.

It joins the list of 14 other companies since 2007 who made their way to the secondary markets, despite their IPOs not being fully subscribed. The last such instance was Star Health and Allied Insurance in December 2021, which saw its maiden public issue subscribed 0.99 times.

While it is rare, there have been a series of IPOs that have listed, despite not achieving full subscription. Since 2007, 14 companies including names like Hindustan Aeronautics Limited and ICICI Securities made their debut on the exchanges, even though their issues were subscribed below 100%.

Subscription levels in these cases ranged from as low as 0.76 times to 0.99 times, showing that companies across sectors and issue sizes have, at different points, managed to list despite falling marginally short of the 100% mark.

However, despite making their way to the markets, the performance of these issues has been largely underwhelming. Most issues have seen negative listing day returns, and the one-year fall from the offer price has been extremely steep.

Companies such as  Oriental Trimex, A2Z Maintenance & Engineering Services and Goenka Diamond & Jewels delivered sharp erosion in value both on debut and over the following year.

Even relatively recent names like Sterling and Wilson Solar and Star Health and Allied Insurance have traded well below their issue prices.One key exception to this list is Hindustan Aeronautics, which, despite a muted listing and weak first year, has since generated strong long-term gains and now trades over 500% above its offer price.

Clean Max's maiden issue was subscribed 99%, falling just short of the full subscription mark. The QIB portion was oversubscribed, at 2.99 times, while the non-institutional investor portion was 57% subscribed, and the retail portion only saw 7% subscription.

This comes even as the firm hired eight book running lead managers (BRLMs) to handle the issue. The eight BRLMs are Axis Capital, JP Morgan India, BNP Paribas, HSBC Securities & Capital Markets, IIFL Capital Services, Nomura Financial Advisory & Securities, BOB Capital Markets, and SBI Capital Markets.

Moneycontrol reached out to all eight BRLMs. JP Morgan India declined to comment, while the other seven banks are yet to respond.

Clean Max's issue will list on the NSE and BSE later today, with the firm's grey market premium indicating a tepid listing. 

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