LEAP India IPO Subs at 2%: GMP Hits 12%, But Retail and NII Demand Remain Low

LEAP India IPO Subs at 2%: GMP Hits 12%, But Retail and NII Demand Remain Low​

LEAP India's initial public offering (IPO) has received a highly muted response on Day 1, with the issue subscribed only 2 percent as of 11:00 am on August 7. The supply chain management and asset-pooling solutions provider is aiming to raise ₹2,480 crore through this listing process.

The public issue saw bids placed for 26,75,710 shares against the offered quantity of 11,49,91,735 shares. The retail investor segment recorded a 4 percent subscription, while the non-institutional investor (NII) category was booked at 2 percent.

Grey Market Premium Versus Public Interest​

Despite the subdued public subscription figures, market tracking platforms indicate significant potential upside based on speculative indicators. The grey market premium (GMP) for the IPO stood at ₹18 as of August 7. This GMP suggests a potential listing gain of 11.5 percent above the upper end of the price band.

It is important to note that the grey market premium is an unofficial indicator and should not be taken as reliable proof of the company's fundamental value or its eventual listing performance. The IPO maintains a fixed price band ranging between ₹151 and ₹159 per share.

Structure and Use of Proceeds in the Listing​

The Mumbai-based firm plans to raise the total amount through a combined fresh issue of equity shares worth ₹480 crore and an offer for sale (OFS) amounting to ₹2,000 crore by promoters Vertical Holdings II and KIA EBT Scheme 3.

Of the proceeds garnered from the IPO, LEAP India intends to utilize ₹360 crore specifically toward debt repayment. The remaining funds will be deployed for general corporate purposes. Proceeds generated from the OFS component are designated for the selling shareholders.

Global Appetite in the Anchor Investment Round​

Before opening the issue to the public, tremendous interest was shown during the anchor investment phase. LEAP India raised ₹743.62 crore through this pre-launch allocation of 4.67 crore equity shares allotted at the upper end of the price band.

The anchor book attracted a robust list of marquee global investors. These institutions include Morgan Stanley, Citigroup, Goldman Sachs, and Societe Generale. Smallcap World Fund, the Monetary Authority of Singapore, and Norway's Government Pension Fund Global were also among the participating entities.

Pre-IPO Stake Transactions Involve Sovereign Funds​

Prior to the IPO launch, KKR-backed Vertical Holdings II conducted a private share purchase agreement. They sold 2.33 crore shares, representing a 5.67 percent stake in LEAP India, for ₹371 crore. This transaction was distinct from the proposed OFS segment of the public issue.

The sovereign wealth fund GIC's investment vehicle, Gamnat Pte, emerged as a major buyer during this pre-IPO stake sale. It acquired 1.76 crore shares, valued at ₹280 crore, which translates to a 4.27 percent pre-issue stake in the company.

Key Advisors and Company Background​

The issue is being managed by three book-running lead managers: JM Financial, Avendus Capital, IIFL Capital Services, and UBS Securities India. LEAP India operates across various sectors including FMCG, e-commerce, automotive, quick commerce, and food and beverages supply chains.