The Initial Public Offering (IPO) of Chennai-based integrated facilities management company, Updater Services, concluded on Wednesday with a less than enthusiastic response from investors. Despite a surge in subscriptions on the final day, the overall response remained tepid.
As per NSE data, the IPO was subscribed 2.90 times on the final day with bids for 3,47,41,450 shares against the 1,19,99,999 shares that were on offer. The subscription was driven mainly by qualified institutional buyers (QIBs), who subscribed 4.48 times their quota. Retail individual investors (RIIs) subscribed 1.38 times their portion while non-institutional investors filled 85 percent of their quota.
Earlier in the week, the IPO had seen a lackluster response with only 0.16 percent subscription, primarily from retail investors. Out of nearly 2 crore shares on offer, the IPO received bids for just 19.23 lakh shares.
The ₹640 crore ($8.6 million) IPO consisted of a ₹400 crore ($5.4 million) fresh issue and an offer for sale of up to 80 lakh shares worth ₹240 crore ($3.2 million). The company's promoter Tangi Facility Solutions Private Ltd offloaded 40 lakh shares and two private equity funds - India Business Excellence Fund-II and India Business Excellence Fund–IIA sold 8 lakh and 32 lakh shares respectively.
Updater Services had reserved not less than 75% of the shares in the public issue for QIBs, not more than 15% for Non-Institutional Investors (NII), and not more than 10% of the offer was reserved for Retail Investors.
As part of the IPO process, Updater Services allotted 96 lakh shares at ₹300 a share to raise ₹288 crore from 18 anchor investors. These included prominent Domestic Institutional Investors such as ICICI Prudential (LON:PRU), BNP Paribas (OTC:BNPQY), Aditya Birla Sunlife, Motilal Oswal, and Foreign Institutional Investors such as Copthall Mauritius, Franklin India, Societe Generale (OTC:SCGLY), CitiGroup Global Market and Nomura Singapore.
The company stated that the net proceeds from the IPO will be used to pay off some of its borrowings, support working capital needs, pursue inorganic activities, and for general corporate purposes.
Updater Services provides a specialized business services platform operating across India, delivering integrated facilities management services and a range of other services. The book-running lead managers to the issue were IIFL Securities Ltd., Motilal Oswal Investment Advisors Ltd., and SBI Capital Markets Ltd.
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