Following regulatory delays, the much-anticipated IPO allotment of C2C Advanced Systems, a defense solutions provider, is set to proceed.
The Securities and Exchange Board of India intervened, requiring additional scrutiny and offering investors the option to withdraw their bids. Here’s an update on the allotment process, investor considerations, and what lies ahead.
SEBI’s Directive Delays Allotment
Initially scheduled for November 27, the allotment was postponed after SEBI directed the company to appoint an independent auditor to reassess its financials.
SEBI also mandated offering investors, including anchor investors, the option to withdraw IPO applications. This step aimed to ensure transparency and compliance, reflecting SEBI’s commitment to safeguarding investor interests.
To further reinforce oversight, SEBI instructed the NSE to deploy a monitoring agency for post-listing fund utilization. These measures underline the regulator’s vigilance in maintaining market integrity.
Withdrawal Window Extended
C2C Advanced Systems extended its withdrawal window from the original dates of November 26–28 to November 29.
The company confirmed that the independent auditor’s report, as per SEBI’s directive, would be available within 2–3 days, ensuring a smooth transition in the allotment process.
Strong Demand Amid Regulatory Challenges
Despite regulatory scrutiny, C2C Advanced Systems’ IPO witnessed significant demand, with the issue subscribed an impressive 125.35 times. The subscription breakdown revealed robust interest from various investor categories:
- Non-Institutional Investors (NIIs): Subscribed 233.13 times
- Retail Investors (RIIs): Subscribed 132.73 times
- Qualified Institutional Bidders (QIBs): Subscribed 31.61 times
Despite delays and extended withdrawal options, this overwhelming response underscores investor confidence in the company’s potential in the defense sector.
Grey Market Premium Suggests Optimism
In the grey market, the IPO is trading at a premium of Rs 195 over the issue price of Rs 226, implying a potential listing price of Rs 416 per share.
Investors should note that grey market activity is speculative and unofficial, with no guarantees of actual listing performance.
Operational Risks Highlighted
While the IPO’s demand reflects optimism, analysts have cautioned about certain risk factors:
- Dependence on Government Contracts: Shifts in defense spending or policy changes may impact revenue.
- Intensified Competition: Increasing global participation in India’s defense market poses challenges.
- Pressure from Indigenization Efforts: Programs like Atmanirbhar Bharat could increase operational costs.
- R&D Delays: Setbacks in research or production may hinder the company’s adaptability.
These factors underscore the importance of careful consideration before investing.
Allotment Status: How to Check
Investors eager to confirm their allotment can do so via two platforms:
On NSE Website:
- Visit NSE IPO Allotment Page.
- Log in with your credentials.
- Select the IPO symbol, enter your PAN or application number, and hit “Get Data.”
On Link Intime Portal:
- Visit Link Intime IPO Allotment Page.
- Select the IPO from the dropdown.
- Enter your application number, Demat details, or PAN.
- Complete the captcha and submit.
The IPO registrar, Link Intime India, will manage allotments, refunds, and investor queries.
Fundraising and Utilization
C2C Advanced Systems raised Rs 8,257.61 crore during the IPO, despite over 3.72 lakh applications worth Rs 27 crore being withdrawn. The raised funds are earmarked for:
- Infrastructure Expansion: A training center in Bengaluru and an experience center in Dubai.
- Operational Costs: Fit-outs, security deposits, and working capital requirements.
- Corporate Purposes: Enhancing financial flexibility and scaling operations.
These plans align with the company’s strategy to grow its domestic and international footprint while meeting diverse defense needs.
SEBI’s Rare Intervention Reflects Oversight
SEBI’s directive marks one of the few instances where the regulator has intervened in an SME IPO. By mandating independent audits and monitoring mechanisms, SEBI emphasizes the importance of transparency and accountability in raising public funds.
Resilience in the Face of Challenges
Despite withdrawals, delays, and heightened scrutiny, investor interest in C2C Advanced Systems remains strong.
The tentative listing on NSE’s SME platform is scheduled for Friday, December 3. The IPO reflects confidence in India’s growing defense and aerospace sector, albeit with cautious optimism.
Disclaimer – This article is for informational purposes only and does not constitute financial advice. MarketScope Daily does not endorse or recommend specific investments. Readers are advised to consult financial advisors for investment decisions. Data provided is based on publicly available information and subject to change.
