Summary of this article
Retail and NII category in KSH International IPO is yet to be fully subscribed
The QIB portion has been fully subscribed
If an IPO does not receive at least 90 per cent subscription of the issue size by the close of the issue, the IPO fails
The initial public offering (IPO) of magnet winding wire manufacturer KSH International entered its third day of subscription on December 18. The Rs 710-crore issue is struggling to get fully subscribed, as the non-institutional investor (NII) and retail investor category is yet to be fully subscribed.
Meanwhile, its latest grey market premium (GMP) in the unlisted market hints at a flat stock market debut, according to websites that track such trades.
KSH International manufactures and exports magnet winding wires and conductors and caters to sectors such as power, renewables, railways, automotive, and industrials.
KSH International IPO Subscription Status: Day 3
KSH International IPO has so far received bids for 11.16 million shares against 13.61 million on offer, as of 4:45 PM on final day. This translates into a subscription of 82 per cent.
The qualified institutional buyers (QIBs) booked the issue by 1.06 per cent, the NII portion was subscribed 41 per cent, and the retail investor portion received 85 per cent bids.
KSH International IPO Details
Issue Size: KSH International seeks to raise Rs 710 crore from the IPO, which consists of 10.93 million fresh equity shares worth Rs 420 crore and about 7.55 million offer-for-sale shares aggregating to Rs 290 crore.
Price Band, Lot Size, Minimum Investment: The price band has been set at Rs 365 to Rs 384 per share. The lot size is 39 shares, requiring a minimum investment of Rs 14,976 for retail investors, based on the upper end of the price band.
Allotment, Listing Dates: The share allotment is expected to be finalised on December 19, and the stock is scheduled to list on the NSE and BSE tentatively on December 23.
BRLMs, Registrar: Nuvama Wealth Management and ICICI Securities are the book-running lead managers to the issue, while MUFG Intime India is acting as the registrar.
KSH International IPO Objectives
The company intends to use the Rs 420 crore net proceeds from the IPO primarily for reducing its debt and expanding its capacity. According to its red herring prospectus (RHP), the company will allocate Rs 226 crore for repayment of its borrowings, Rs 87 crore for purchasing and installing new machinery at two of its plants. The company will also invest Rs 8.83 crore in setting up a rooftop solar power plant at its Supa facility. The remaining funds will be used for general corporate purposes.
KSH International IPO GMP Today
KSH International IPO’s GMP stood at nil, as of 2:57 PM on December 18. Based on the upper price band of the IPO, the expected listing price of KSH International shares comes flat at Rs 384 per share.
It is worth noting that GMP does not represent actual listing gain; rather, it is just a metric that gives an idea of the demand for shares in unofficial markets.
What Happens If An IPO Remains Undersubscribed
According to the Securities and Exchange Board of India (Sebi) Issue of Capital and Disclosure Requirements Regulations, if an IPO does not receive at least 90 per cent subscription of the issue size by the close of the issue, the IPO fails. The company cannot proceed with allotment, and the company is required to refund the entire application money to investors within the stipulated timeline. No shares are allotted, and the issuer does not raise any capital.
If the IPO achieves the minimum 90 per cent subscription, but remains undersubscribed overall, the issue can still go through. Shares are allotted against valid bids, and the remaining portion is absorbed by underwriters, if the issue has been underwritten, in line with the terms disclosed in the prospectus.
