Investors lined up in large numbers for Tonbo Imaging’s Rs 852 crore public offering, which closed with bids worth many times the shares on sale. Investors put in offers for 1,15,86,91,464 shares, while only 85,26,033 shares were available. That works out to demand of roughly 136 times the offer size, which headlines have rounded to about 140 times.
Big institutions drove the response. Qualified institutional buyers, such as mutual funds, insurers and other large professional investors, bid for 293.56 times the shares reserved for them. No other group came close to that level of enthusiasm.
Wealthy individuals and companies bidding in the non-institutional category were also keen. Their portion was subscribed 170.94 times, meaning they asked for well over 170 shares for every one set aside for them.
Small retail investors were more restrained, though their quota was still oversubscribed. Their portion drew bids for 31.06 times the shares available. Because demand far exceeds supply in every category, many applicants will probably receive only part of what they asked for, or nothing at all, especially in the retail segment where allotment is usually decided by lottery.
Investors who applied should watch for the allotment announcement, which is normally published by the registrar and the stock exchanges. Applicants can check their status online using their application or PAN details. Those who miss out should get refunds sent to their bank accounts, while successful bidders will see shares credited to their demat accounts before trading begins.
Many investors also track the grey market premium, an unofficial indicator of what shares may fetch on listing day. It is only a rough guide, however, and can change quickly. It does not guarantee a gain or reflect the company’s actual value.
Strong subscription numbers show appetite for the offering, but they do not remove market risk. Anyone considering the shares should review the company’s finances and prospectus carefully.