Say Cheers! Allied Blenders And Distillers IPO Gets Fully Subscribed On Day 2; GMP Hints Strong Listing

The IPO of Allied Blenders and Distillers Ltd (ABD), the company behind the popular Officer's Choice Whisky, has witnessed healthy investor interest on its second day of bidding. The non-institutional investor portion was fully subscribed, and retail investors followed closely. By 2:57 pm, the IPO subscription status stood at 1.12 times, as per BSE data.

ABD's initial share sale garnered bids for 4,35,86,564 shares against an offering of 3,93,71,669 shares, marking a milestone in the company's IPO journey. The portion for qualified institutional buyers (QIBs) saw a modest 9% subscription. In contrast, the category for non-institutional investors was subscribed 1.90 times. Retail individual investors (RIIs) showed a 1.35 times subscription, and the employee portion was impressively oversubscribed at 4.49 times.

The IPO got off to a slow but steady start on its first day of bidding, Tuesday, June 25. At the close of day one, the subscription status was 51%. The employee portion was fully booked early, hinting at the growing interest that would follow. By the end of the day, the retail investor segment was 63% subscribed, the non-institutional investor group was at 87%, and the QIBs had a subscription rate of 2%. The employee portion saw 2.06 times subscription, indicating strong confidence from within the company.

The ABD IPO, set to conclude on Thursday, June 27, has a price band ranging from Rs 267 to Rs 281 per equity share, with a face value of Rs 2. A day before the IPO opened for public subscription, ABD secured Rs 449 crore from anchor investors, setting a positive tone for the offering.

ABD, a key player in the Indian-Made Foreign Liquor (IMFL) sector, produces, markets, and distributes a variety of alcoholic beverages worldwide and domestically. By Fiscal 2023, ABD held a market share exceeding 8% in the IMFL sector based on sales volumes. The company's portfolio includes whiskey, vodka, rum, and brandy under its IMFL brands.

The Rs 1,500 crore IPO comprises a fresh issue of Rs 1,000 crore and an offer-for-sale (OFS) of Rs 500 crore worth of equity shares by promoters and other investors. Promoters Bina Kishore Chhabria and Resham Chhabria Jeetendra Hemdev will offload shares in the OFS. The IPO is managed by ICICI Securities Limited, Nuvama Wealth Management Limited, and Iti Capital Ltd, with Link Intime India Private Ltd serving as the registrar.

The grey market premium (GMP) for ABD's IPO has been a topic of significant interest among investors. On the day of the report, the GMP stood at +87, indicating that ABD's shares were trading at a premium of Rs 87 in the grey market, according to investorgain.com. This suggests an expected listing price of Rs 368 per share, 30.96% higher than the upper end of the IPO price band at Rs 281.

Grey market activity over the past 13 sessions has pointed towards a higher listing, with the GMP reaching a maximum of Rs 87. The lowest GMP recorded was Rs 0. The GMP is a clear indicator of investors' willingness to pay more than the issue price, reflecting strong market sentiment and optimism about ABD's potential performance post-listing.

The positive response to ABD's IPO, especially from non-institutional investors and retail participants, shows the market's confidence in the company's growth trajectory and robust business model. The fully subscribed non-institutional investor portion and the substantial retail interest reflect a broad-based belief in the company's future prospects.

Analysts believe that ABD's strong market presence, coupled with its extensive portfolio of popular alcoholic beverages, positions it well to capitalize on the growing demand in the IMFL sector. The funds raised from the IPO will likely be used to enhance production capacities, expand market reach, and streamline operations, further strengthening ABD's market position.

Allied Blenders and Distillers Ltd's IPO has seen a strong start, with interest from various investor segments. As the bidding process continues, the robust subscription rates and positive grey market premiums suggest a promising listing ahead. Investors and market watchers will observe the final subscription numbers and the listing performance, which will provide further insights into the company's valuation and future potential.