QIB, HNI interest keeps IPO market buzzing

Investor interest in the ongoing initial public offering (IPOs) is showing no sign of cooling down, with both Tata Tech and the Indian Renewable Energy Development Agency (IREDA) garnering massive subscriptions.

IREDA closed its IPO with a massive 38.8x subscription, spurred by a 104.57x booking in the qualified institutional buyer (QIB) portion. The last instance of an IPO seeing a higher QIB booking was in 2019, when Indian Railway Catering and Tourism Corporation (IRCTC)’s QIB segment saw bids of 105.55x.

The non-institutional and retail portions saw bids of 24.16x and 7.73x. The price band for the Rs 2,150.21-crore offer was fixed at Rs 30-32 a share.

Tata Technologies — the other major IPO — was booked 14.85x on Thursday, the second day of subscription. While there were bids of 8.55x and 11.2x for the QIB and retail portions, the HNI or non-institutional portion was booked 31x. The Rs 3,042-crore IPO, which closes on Friday, has its price band fixed at Rs 475-500 a share.

Among the smaller IPOs, both Gandhar Oil and Flair were fully subscribed on the second day of the issue, while Fedbank was the only one to not see full subscription.

Gandhar’s Rs 500-crore IPO saw a strong 15.25x booking, thanks to a 26.3x HNI booking, while the QIB and retail segments were booked 3.14x and 17.24x. Flair, on the other hand, was subscribed 6.11x, with notable interest from HNIs (10x). The QIB and retail portions saw a 1.36x and 7.14x booking.

“The overall market sentiment is positive, and IPOs leave a lot on the table for investors. It is an attractive avenue for HNI investment, as it leaves the door open for listing day gains,” added Naik.

Fedbank’s public issue remained the damp squib, failing to generate any enthusiasm among investors. The issue was subscribed a mere 0.9x, with few takers across the QIB and HNI portions. Only the retail segment saw full subscription of 1.25x.

A banker who did not wish to be named, said that Fedbank has seen a lukewarm response given the impact of the recent regulatory changes. However, it is likely to do well once listed, he added.

Market players have recently been of the view that the market is ripe for IPOs and the sentiment is generally strong. This is because firms to have listed of late have generally done well and lived up to expectations.

Additionally, the rally in mid- and small-cap indices for the major part of the year has not only strengthened market sentiment but has also given confidence to retail investors.