Now Get Live Subscription Numbers for IPOs of NCDs and Tax-Free Bonds

 This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Markets for corporate non-convertible debentures (NCDs), mostly issued by NBFCs, and tax-free bonds issued by public sector undertakings (PSUs) like NHAI, PFC, REC, IRFC and HUDCO have been expanding at a very rapid pace. With more and more awareness spreading about them, investors are getting interested in these instruments as equity markets are taking very long to come out of the woods.

But, as these securities are relatively new to many of the retail investors, they are finding it difficult to get reliable information about these securities. Accurate, relevant, and timely information is the key to good decision making. Realizing this and to keep the market participants, including the investors, well informed, SEBI has made it mandatory in the public issues of debt securities to bid for all the applications before submitting it to the collection banks.

This process for the public issues of debt securities like NCDs or tax-free bonds is very much similar to the IPO process of equity offerings. Earlier the investors used to remain clueless about the subscription figures of these issues, hunt for various sources for this info and seek help from their respective brokers, sub-brokers, agents or forums like OneMint. Lack of information or delayed information was making them indecisive to invest in these issues as they did not want to block their money without getting the bonds allotted.

Now with the information running Live on the exchange(s) where the issuer has proposed to list its debt securities, anybody can check the investors’ response to the issue online very quickly.

What was happening earlier?

Earlier the investors or the intermediaries assisting the investors were not required to visit any of the bidding centers in order to submit their applications. They used to visit the collection banks and submit the applications directly along with the cheque/demand draft and other necessary documents. The collection banks used to realize the payments for these applications in the Escrow Account of the issuer, punch the data into their systems by the evening and report the details of the same to the Registrar.

The application forms were then getting forwarded to Registrar for procurement analysis and resolution of investor grievances. As there were no bidding provisions, data was not getting updated on a real time basis and the subscription figures of the issue were getting updated very late in the day or in the morning of the next day. This was making the investors and the intermediaries unaware of the subscription figures.

What will happen now onwards post SEBI circular dated July 27, 2012

SEBI vide its circular no. CIR/IMD/DF-1/20/2012 dated July 27, 2012 has directed to the stock exchanges to put in place necessary systems and infrastructure to facilitate making applications to public issue of debt securities. The bidding process has also been made mandatory to put in place such systems. Now, because of this, the investors or the intermediaries assisting the investors will be required to visit the bidding centers of the syndicate members/trading members of the stock exchanges to submit their applications, which in turn will upload all the details of these applications on the online platform of the stock exchanges. This will be made Live by these exchanges on real time basis on their respective websites for market participants’ reference.

Now it will be the responsibility of these syndicate members/trading members to submit your applications along with the cheque/demand draft to the collection banks. The collection banks will continue to realize the payments for these applications in the Escrow Account of the issuer and forward these applications to the Registrar for procurement analysis and resolution of investor grievances.

India Infoline Finance Limited (IIFFL) has become the first company for which this system has been implemented by both the exchanges, BSE and NSE, where its NCDs are proposed to be listed. Here are their respective links to check the latest data for this issue’s subscription figures:


You can check the break-up of the subscription figures by each category of investors and their respective sub-categories of investors from this page of NSE.

Here is the graphical display of all the bids received in the issue cumulatively on BSE and NSE –

“Total Issue Size” shows the number of NCDs the company is offering in the issue without the green-shoe option, which is 25,00,000 (or 25 lakhs).

“Total Bids Received” shows the number of NCDs for which the bids have been received by both the exchanges collectively. This figure stands at 61,74,680 by the closing hours on September 6, 2012. Out of these 61,74,680 NCD bids, Series 1 (Monthly Interest Option) got the maximum number of bids for around 48,86,900 NCDs, Series 2 (Annual Interest Option) got bids for around 6,93,500 NCDs and Series 3 (Cumulative Interest Option) got bids for around 5,94,300 NCDs.

“No. of times issue is subscribed” is a figure which is derived by dividing Total Bids Received by Total Issue Size i.e. 61,74,680/25,00,000 = 2.47 Times.

I think this is a good step taken by the market regulator SEBI to keep us updated with the subscription figures of debt securities online. But, at the same time, it will cause some inconvenience to the investors who were earlier getting their applications submitted themselves with the collection banks. Now they will need to approach the syndicate members/trading members for bidding first and these members might insist the investors to use their applications before accepting them. SEBI need to appoint neutral participants to play the role of bidding centers. Lets see what happens!

3 thoughts on “Now Get Live Subscription Numbers for IPOs of NCDs and Tax-Free Bonds”

  1. Good move. When the first tax free bond issue came 1.5 years back (from NHAI), many newspapers announced on day-1 that it was oversubscribed multiple times (including retail quota). so, I did not invest in that. only after the issue got closed, fact came out that retail quota was undersubscribed and hence it was given away to HNIs !!! Well, you can imagine who created this confusion. similar news came for next few issues as well, but some retail guys like me still applied and got full quota.

    1. As it is always said – “Accurate, relevant, and timely information is the key to good decision making”. Things move at a slow pace here in India. Also, this move has introduced intermediaries into the picture which has made it somewhat difficult for the investors to submit their applications directly.

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