Signature Global, an India-based real estate developer, concluded its initial public offering (IPO) on Friday, witnessing an oversubscription of 3.18 times by the final day of bidding. The IPO, valued at Rs 730 crore (Rs 1 crore = $120,545), received bids for 35.8 million shares out of a total 11.2 million equity shares issued.
The company divided the share allocation into different categories for investors. Retail investors and high net worth individuals (HNIs) were allotted 10% and 15% of the shares respectively, with subscription rates reaching 4.33 times and 6.19 times their respective quotas. The majority portion, 75%, was reserved for qualified institutional buyers (QIBs), who subscribed at a rate of 1.38 times.
The IPO consisted of a fresh issue of shares worth Rs 603 crore and an offer-for-sale of shares worth Rs 127 crore by the International Finance Corporation. The price range for these shares was set between Rs 366 ($1 = Rs 82.96) and Rs 385 per share.
The IPO launched on September 20th and achieved a subscription rate of 1.61 times on its second day. To be deemed successful, a minimum subscription of 90% is required in the QIB category.
Signature Global plans to utilize the proceeds from this IPO to repay its own debt as well as that of its subsidiaries, which currently stands at Rs 432 crore out of a total debt of Rs 495.26 crore as of June 30th. The remaining funds will be allocated towards land acquisitions and general corporate purposes.
Despite reporting losses in previous financial years, the company managed to reduce its losses in the past year. The net loss for the financial year 2023 was Rs 63.7 crore, down from a loss of Rs 115.5 crore in the financial year 2022. Meanwhile, the company's revenue increased to Rs 1,553.6 crore from Rs 901.3 crore during the same period.
The allotment of IPO shares will be finalized by September 27th, and shares will be credited to the demat accounts of eligible investors by October 3rd. Those investors who were unsuccessful in their bids will receive refunds by September 29th.
Signature Global's shares are set to be listed on the BSE and NSE on October 4th, according to the IPO schedule. This date might change due to recent adjustments to SEBI’s new timeline of T+3, which will become mandatory for all IPOs from December 1, 2023.
In the grey market, an informal trading platform for IPO shares, Signature Global's shares were reportedly trading at a 9% premium over its upper price band.
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