Anchor Book Arithmetic and the Public Float in a ₹600 Crore IPO
Vantara Logistics Ltd, an unlisted mainboard aspirant, has filed its RHP for a ₹600 crore offer: a fresh issue of ₹480 crore and an offer for sale of ₹120 crore by the promoter family. Pre-issue paid-up capital is 30 crore equity shares of ₹10 each, held entirely by the promoter family. The fresh issue will add 10 crore shares at the ₹300 upper band, and the book-built issue has a price band of ₹285–₹300. The BRLM has built an anchor book of ₹240 crore, arguing that anchor demand justifies a larger carve-out than the ₹180 crore it first proposed. Among the anchor bidders is an investment vehicle in which the promoter's daughter and her husband hold 100% of the beneficial interest. The promoter also wants to bid in the QIB portion, and two FPIs have asked that part of the offer for sale be allotted to them on a discretionary basis at a price 3% below the cut-off. The promoter wants to know how far its holding can fall while the public float stays compliant.
1. Compute the maximum permissible anchor investor portion and the allocation to the QIB (excluding anchor), non-institutional and retail categories. State the lock-in that applies to anchor allotments.
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Step 1 - category split. The net offer to the public is ₹600 crore: QIB 75% = ₹450 crore; non-institutional 15% = ₹90 crore; retail 10% = ₹60 crore.
Step 2 - anchor cap. The anchor portion must clear two limits: not more than 60% of the QIB portion (60% × ₹450 crore = ₹270 crore) and not more than 30% of the total offer size (30% × ₹600 crore = ₹180 crore). The lower figure binds, so the maximum anchor book is ₹180 crore, not the ₹240 crore proposed. The ₹60 crore excess cannot be allotted as anchor; those bids must either enter the QIB book or lapse. The balance of the QIB portion available to other QIB bidders is ₹270 crore.
Step 3 - lock-in and minimum size. Half of each anchor's allotment is locked in for 30 days and the balance for 90 days from the date of allotment. No anchor may be allotted less than ₹10 crore. Anchor allocation is discretionary and must be completed, and reported to the exchange, on the working day before the issue opens. Allotting ₹240 crore would be an ICDR breach requiring the excess to be unwound.
2. Advise on (a) the anchor bid from the promoter's daughter and son-in-law's vehicle and (b) the request of the two FPIs for a discretionary allotment at 3% below the cut-off.
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(a) The related-party vehicle is ineligible. No person related to the promoter or the promoter group may be an anchor investor. A daughter and a daughter's husband are expressly relatives under s.2(77) of the Companies Act, 2013, so a vehicle wholly beneficially owned by them is a related entity. SEBI looks through the corporate wrapper to beneficial ownership; if the allotment is made, it is vulnerable to cancellation and the issuer and BRLM face action under the ICDR Regulations. The bid must be rejected from the anchor book.
(b) The discounted discretionary allotment is impermissible. In a book-built issue, every successful bidder in the net offer - QIB, non-institutional or retail, and whether the shares come from the fresh issue or the offer for sale - is allotted at one discovered price. A 3% discounted allotment to two FPIs would destroy price discovery and breach the uniform-price and price-band requirements. The anchor route is the only permitted discretionary allocation, and it comes with its own cap, lock-in and eligibility conditions. Shares allotted to the promoter group would in any case be excluded when computing the public float.
3. Given the ₹120 crore offer for sale, what will the promoter's post-issue holding be, and what is the minimum offer for sale needed if the promoter wishes to retain no more than 74.5%? Is the public float compliant?
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Post-issue capital = 30 crore existing shares + 10 crore fresh shares = 40 crore shares.
Offer for sale shares = ₹120 crore ÷ ₹300 = 0.4 crore shares. The promoter retains 29.6 crore shares = 74.0%, leaving a public float of 26.0%, comfortably above the 25% minimum.
The 74.5% target. 74.5% of 40 crore shares = 29.8 crore shares. The promoter must therefore sell at least 0.2 crore shares, i.e. ₹60 crore at the upper band. The planned ₹120 crore offer for sale sells twice that, one percentage point more than needed, so the promoter ends at 74.0% rather than 74.5%. Reducing the offer for sale to ₹60 crore would land it exactly at 74.5%.
Float test. The fresh issue alone creates 10 crore public shares, exactly 25% of post-issue capital, so the minimum public shareholding test is satisfied even without any offer for sale; the offer for sale only adds float. The two FPIs' below-cut-off demand remains impermissible and cannot be used to place the offer for sale.