Qualiance International Limited table exceeds net issue shares

Qualiance’s issue-structure table contains an apparent allocation inconsistency: it lists at least 1.1802 crore equity shares for Individual Investors although the stated Net Issue to Public is only 33.72 lakh shares. The printed individual figure exceeds the Net Issue by 84.30 lakh shares and equals 350% of that stated pool.

Why does Qualiance’s individual allocation exceed the Net Issue?

Qualiance’s table cannot be reconciled on its face because the Individual Investor allocation is larger than the pool from which it is described as being drawn. The issue structure on page 250 states a Net Issue to Public of up to 33.72 lakh equity shares, after reserving up to 1.80 lakh shares for the designated market maker from a total issue of up to 35.52 lakh shares. In the same table, the Individual Investors column states “not less than 1,18,02,000” equity shares, or 1.1802 crore shares.

The numerical gap is 84.30 lakh shares: 1.1802 crore shares listed for individuals minus the 33.72 lakh-share Net Issue. The disclosed individual allocation equals 350% of the Net Issue, although the adjacent percentage row says Individual Investors should receive “not less than 35.00% of Net Offer.” No additional share pool is identified in the issue structure to account for the excess.

What should the 35% individual allocation imply?

Qualiance’s stated 35% minimum for Individual Investors implies at least 11.802 lakh shares, based on 35% of the disclosed 33.72 lakh-share Net Issue. The calculation is 33.72 lakh multiplied by 35%, producing 11,80,200 shares. The table instead prints 1,18,02,000 shares, a figure exactly 10 times the arithmetical result.

That tenfold relationship may indicate a digit, comma-placement or transcription error, but the document does not identify the entry as erroneous or provide a correction. The same table assigns Non-Institutional Investors a minimum of 5.07 lakh shares, equal to 15% of the 33.72 lakh-share Net Issue. It caps Qualified Institutional Buyers, or QIBs, at 16.83 lakh shares, equal to 50% of the Net Issue.

The comparison shows that the QIB and Non-Institutional Investor entries follow the percentages printed in the same table, while the Individual Investor share count does not. The three stated category percentages, 50%, 15% and 35%, total 100% of the 33.72 lakh-share Net Issue, before any permitted movement of unsubscribed shares.

How do Qualiance’s category rules affect the discrepancy?

Qualiance’s narrative allocation rules describe Individual Investors as one component of the Net Issue rather than a separate offer. The book-building procedure on page 256 states that not more than 50% of the Net Issue may go to QIBs, not less than 15% to Non-Institutional Investors and not less than 35% to Individual Investors, subject to valid bids at or above the issue price. Those rules place all three categories within the same 33.72 lakh-share public pool.

The document permits spill-over where a category other than the QIB portion is undersubscribed. Under that mechanism, the unsubscribed portion may be allocated to another category or combination of categories at the company’s discretion, in consultation with the book running lead manager and the designated stock exchange. Spill-over can alter final allocations within the Net Issue, but it does not create an additional 84.30 lakh shares.

Qualiance separately identifies the market-maker reservation as 1.80 lakh shares, or 5.07% of the 35.52 lakh-share total issue. The Net Issue represents 25.07% of post-issue paid-up equity share capital, while the entire issue represents 26.40%. This separation does not disclose another pool that could support an individual allocation of 1.1802 crore shares.

Why does the Qualiance table matter for disclosure quality?

Qualiance’s allocation table matters because it sets out how bids may be considered across QIBs, Non-Institutional Investors and Individual Investors. The document says the issue is made under Chapter IX of the Securities and Exchange Board of India’s Issue of Capital and Disclosure Requirements Regulations, 2018, or SEBI ICDR Regulations, through a book-building process. The table is therefore intended to link the offer size to category-specific allocation rules.

The discrepancy does not establish the final allotment outcome. The prospectus says the basis of allotment will be finalised with the designated stock exchange and that allocation depends on valid bids at or above the issue price. However, the printed Individual Investor figure is greater than both the 33.72 lakh-share Net Issue and the 35.52 lakh-share total issue.

Qualiance states that it may revise the price band during the bidding period, in consultation with the book running lead manager, within the conditions disclosed in the prospectus. That provision concerns the price per share, while the table discrepancy concerns the number of shares available for allocation. A rectification would need to clarify whether 11.802 lakh shares is the intended Individual Investor figure or whether another part of the issue structure is to be revised.

Conclusion

Qualiance’s disclosed figures show an arithmetic conflict: a 1.1802 crore-share Individual Investor allocation is incompatible with a 33.72 lakh-share Net Issue and with the table’s stated 35% minimum allocation rule. The QIB and Non-Institutional Investor figures match their respective 50% and 15% rules, making the Individual Investor entry the specific outlier.

The next disclosure to watch is a rectified allocation table or clarification from Qualiance before allotment. The prospectus provides for category spill-over after valid bidding and for allotment to be finalised with the designated stock exchange, but neither disclosed process reconciles the present 84.30 lakh-share excess without a corrected share count.