Storage Technologies and Automation IPO Booked 100% on Day 1: Check Subscription Status and Other Details
The IPO subscription for Storage Technologies and Automation commenced on Tuesday, April 30, in response to a high level of investor interest. Driven by considerable interest from Retail investors, the first public offer, a new issue of 38.4 lakh shares at a face value of ₹10 for each, was fully booked within hours of its debut.
On May 6, the status of the IPO share allotment for Storage Technologies and Automation is anticipated to be finalized. On May 8, Storage Technologies and Automation shares are probably going to go listed on the BSE SME platform.
Storage Technologies & Automation Limited, known as Racks and Rollers, is a prominent name in the storage, warehousing, and automation industry. The company was incorporated on March 19, 2010, and is based in Bangalore, Karnataka. It specializes in the design, manufacture, and installation of metal storage racks and automated warehouse systems, catering to a variety of industries such as oil & gas, automotive, aerospace, food & beverages, pharmaceuticals, textiles, retail, and FMCG.
Storage Technologies & Automation Limited, known as Racks and Rollers, is a company that specializes in the design, manufacturing, and installation of storage racking systems and automated warehouses. For the seven months of FY24 ending on October 31, 2023, the company reported a net profit of Rs. 3.59 cr. on a total revenue of Rs. 53.17 cr. This marked a significant increase compared to previous years, indicating a period of substantial growth for the company. The company's order book value as of April 1, 2024, stood at Rs. 21.36 cr., suggesting a strong pipeline of future revenue. The financial growth is attributed to the company's expansive infrastructure and commitment to quality as an ISO 9001:2015 certified entity. The company's financial performance, particularly the bumper profits in 7M-FY24, has attracted attention and raised questions about the sustainability of such earnings. However, the company's strategic business approaches and operational efficiency position it well to meet the evolving needs of its clients.
Storage Technologies & Automation IPO Subscription Status
Storage Technologies & Automation IPO was booked 100% on Day 1. Today, the Retail portion has been subscribed 5.00 times and the non-institutional investor (NII) category has been subscribed 2.23 times. Whereas, the QIB and Anchor Investors were subscribed 0.02 times and 1 time, respectively.
Storage Technologies & Automation IPO has received bids for 76,11,200 shares against 25,50,400 shares on offer, according to data from the BSE.
The retail investors' segment received bids for 63,79,200 shares against 12,75,200 shares on offer for this segment.
The NIIs portion got bids for 12,19,200 shares against 5,47,200 on offer for this segment.
The QIB Portion got bids for 12,800 shares against 7,28,000 on offer for this segment.
Storage Technologies & Automation Limited IPO Details
Issue Date: The issue date in an IPO, also known as the initial offering date, is when a company's stock is first made available for public purchase. This date is a significant milestone in the process of an initial public offering, marking the transition of a company from private to public status. (Issue Date: April 30, 2024 to May 3, 2024).
Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Wednesday, May 8, 2024).
Face Value of Shares: The face value of shares in an IPO, also known as the nominal or par value, is a predetermined fixed price set by the company and mentioned in its memorandum of association. It represents the initial capital contributed by the founders and is used for accounting and regulatory purposes. During an IPO, shares are typically offered at a price higher than the face value, which includes a premium based on market demand and the company's performance indicators. (IPO Face Value: ₹10 per share).
Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹73 to ₹78 per share).
Lot Size: In an Initial Public Offering (IPO), the lot size refers to the minimum number of shares an investor can apply for. It is a pre-determined set of shares that investors must bid for, and applications must be in multiples of this lot size. The lot size ensures a standardized bidding process and helps in the fair allocation of shares among investors. (Lot Size: 1600 Shares).
Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 3,840,000 shares (aggregating up to ₹29.95 Cr)).
Fresh Issue: A fresh issue in an Initial Public Offering (IPO) refers to the creation and sale of new shares by a company to the public. This process helps the company raise new capital that can be used for various purposes such as expansion, debt repayment, or investment in new projects. Unlike an Offer for Sale, where existing shareholders sell their shares, a fresh issue results in the issuance of additional stock, which can lead to equity dilution for existing shareholders. The funds raised through a fresh issue go directly to the company, providing it with resources to grow and invest in its future. (Fresh Issue: 3,840,000 shares (aggregating up to ₹29.95 Cr)).
Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Building IPO).
Listing At: The listing of shares in an IPO refers to the process where a company's shares are introduced to the public stock market, allowing investors to buy and sell the shares through a stock exchange. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: BSE SME).
Retail Shares Offered: This refers to the portion of the total shares being made available specifically for individual investors, distinct from institutional investors like banks or hedge funds. Regulatory bodies often mandate a minimum percentage of shares be reserved for retail investors, aiming to promote broader public participation in the capital markets. (Retail Shares Offered: Not less than 35% of the Net Issue).
QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: Not more than 50% of the Net Issue).
NII (HNI) Shares Offered: NII stands for Non-Institutional Investors, which includes High Net-worth Individuals (HNIs) who bid for shares worth more than ₹200,000. The NII category is reserved for investors who do not fall under the retail or Qualified Institutional Buyers (QIBs) categories. Typically, a certain percentage of the IPO, usually around 15%, is allocated for NIIs to ensure a wider distribution of shares. HNIs within the NII category often have a higher chance of allotment compared to retail investors, making it an attractive option for those looking to invest larger sums in an IPO. (NII (HNI) Shares Offered: Not less than 15% of the Net Issue).
Conclusion
In conclusion, the initial public offering (IPO) of Storage Technologies & Automation garnered a mixed response on its opening day. The retail category showed a robust subscription rate, indicating strong interest from individual investors. However, the qualified institutional buyers (QIB) and non-institutional investors (NII) categories reflected a more tepid reaction. This divergence highlights the varied perspectives and strategies among different investor classes. As the IPO progresses, it will be interesting to observe how these trends develop and what they signify for the company's market debut. Investors are advised to keep a close watch on the subscription rates as they unfold, and to consider the broader market conditions and the company's fundamentals before making investment decisions. The final subscription status will be a key indicator of market confidence in Storage Technologies & Automation's growth prospects and operational strengths.
Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.