Mega IPO Rush: Meesho, Aequs, Vidya Wires Storm Dalal Street with Record Subscriptions & Soaring Premiums!

IPO Frenzy Grips Investors

Three prominent Initial Public Offerings (IPOs) – Meesho, Aequs, and Vidya Wires – are drawing significant investor attention as their subscription periods approach their final day. The strong demand is reflected in high subscription numbers across all categories and rising Grey Market Premiums (GMPs), indicating a positive outlook for their upcoming market debuts.

Key Subscription Data

• Meesho: By the end of Thursday, the second day of bidding, Meesho's Rs 5,421 crore IPO was subscribed 7.97 times. The retail portion saw a subscription of 9.14 times, non-institutional investors (NIIs) applied 9.18 times, and qualified institutional buyers (QIBs) subscribed 6.96 times.
• Aequs: The contract manufacturing firm's Rs 922 crore IPO was subscribed an impressive 11.10 times on Thursday. Its retail category was highly sought after, subscribed 32.92 times, followed by NIIs at 16.81 times. The QIB quota was subscribed 73 percent.
• Vidya Wires: The Rs 300 crore IPO from Vidya Wires Ltd garnered strong interest, being subscribed 8.26 times by Thursday. Retail investors showed enthusiasm with 11.45 times subscription, while NIIs applied 10 times. The QIB portion saw 1.30 times subscription.

Anchor Investor Contributions

• Before opening to the public, these companies successfully raised substantial amounts from anchor investors.
• Meesho secured over Rs 2,439 crore from anchor investors.
• Aequs raised Rs 414 crore.
• Vidya Wires garnered Rs 90 crore.

Upcoming Listings and Allotment

• All three mainboard issues are scheduled to be listed on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on December 10.
• The allotment of shares for these IPOs is expected to be finalized on December 8.

Market Sentiment and Outlook

• The rising GMPs for all three IPOs in the unregulated market signal strong investor appetite and expectations of healthy listing gains.
• The robust subscription across retail, NII, and QIB categories suggests broad market confidence in these companies and the primary market environment.

Impact

• The strong performance of these IPOs can significantly boost investor confidence in the Indian primary market, potentially encouraging more companies to go public.
• Successful listings could lead to positive returns for investors who participated, enhancing market liquidity and sentiment.
• This heightened activity in the IPO segment may also reflect a broader positive trend in the Indian stock market.
• Impact Rating: 8/10

Difficult Terms Explained

• IPO (Initial Public Offering): The first time a private company offers its shares to the public, allowing it to raise capital and become a publicly traded entity.
• GMP (Grey Market Premium): An unofficial indicator of demand for an IPO, representing the price at which IPO shares trade in the grey market before their official listing. A positive GMP suggests shares are expected to trade higher than the issue price.
• Subscription: The process where investors apply for shares in an IPO. A subscription rate of 'X' times means that 'X' times the number of shares offered have been applied for.
• Anchor Investors: Large institutional investors (like mutual funds, foreign portfolio investors) who commit to investing in a portion of an IPO before it is made available to the general public. They provide early validation and stability to the issue.
• Mainboard: Refers to the primary listing platform of a stock exchange (like NSE or BSE) for established companies, as opposed to smaller or specialized exchanges.
• QIB (Qualified Institutional Buyer): Sophisticated institutional investors such as mutual funds, venture capital funds, insurance companies, and foreign institutional investors.
• NII (Non-Institutional Investor): Investors who bid for IPO shares worth more than Rs 2 lakh, excluding retail and institutional investors. This category often includes high-net-worth individuals and corporate bodies.
• Retail Investor: Individual investors who apply for IPO shares with a total value of up to Rs 2 lakh.