All you need to know about Netweb Technologies IPO. Netweb Technologies India, a provider of computing solutions, is set to launch its initial public offering (IPO) on 17th July, open for public subscription. The subscription period for the IPO will span three days, closing on 19th July.
The Netweb Technologies IPO comprises a fresh issuance of shares worth ₹206 crores, along with an offer for sale of up to 85 lakh shares by existing promoters and shareholders. The public issue has been priced in the range of ₹475-500 per share. At the upper price band, the company aims to raise ₹631 crores through the IPO.
After the completion of the public offering, Netweb Technologies shares will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on 27th July. The allotment of Web Technologies IPO is expected to take place on 24th July.
For the Netweb Technologies IPO, the lot size has been set at 30 shares. Retail investors have the opportunity to apply for a maximum of 13 lots.
Netweb Technologies India Limited specializes in high-end computing solutions (HPC) and provides services in various sectors, including IT, IT-enabled services, entertainment, media, BFSI, national data centers, and government organizations.
The company operates a manufacturing facility in Faridabad, Haryana, and has 16 offices across India. Its 3 supercomputers have been listed 11 times in the Top 500 supercomputers in the world by NTL.
The company has raised ₹51 crores through a pre-IPO placement at a price of ₹500 per share from institutional investors, including the LG Family Trust and Anupama Kishor Patil.
In the fiscal year 2023, the company witnessed a substantial 80% growth in revenue, reaching ₹445 crores, compared to ₹247 crores in the preceding year. During the same period, its net profit doubled from ₹22.5 crores to ₹47 crores. The EBITDA margin increased to 15.7% in the financial year 2013 from 10.1% in the financial year 2011.
Today’s Netweb Technologies IPO’s GMP (Grey Market Premium) is as follows.
According to market observers, the Netweb Technologies IPO’s GMP (Grey Market Premium) today, or the premium in the unofficial market, is ₹365 per share. This means that shares of Netweb Technologies are trading at a premium of ₹365 per piece in the unlisted market. Considering today’s IPO price and GMP, it is expected that shares of Netweb Technologies will list on exchanges at ₹865 per share, which is a premium of 73%.
Should you subscribe to the Netweb Technologies IPO?
Most analysts have given a ‘Subscribe’ rating to the Netweb Technologies IPO considering its business capacity, revenue growth, and fair valuation.
Financial services provided by Marwadi
The brokerage firm has provided a “Subscribe” rating for the Netweb Technologies IPO, considering the company’s prominent position as one of the leading providers of HCS (High Computing Solutions) in India. It operates within a rapidly advancing industry, making it an appealing investment opportunity and technologically advanced industry with significant entry barriers.
“This favorable position and strength have been achieved due to the company’s strong financial performance and impressive track record of consistent growth. Additionally, it is available at a reasonable valuation compared to its competitors,” said the brokerage.
Based on the post-issue FY23 EPS of ₹8.37, the company is expected to be listed at a P/E ratio of 59.72x with a market cap of ₹28,032 million. Comparable companies include Syrma SGS Technology, Kaynes Technology India Ltd, and Dixon Technologies Ltd. Marwadi Shares and Finance noted that these companies are trading at P/E ratios of 72x, 106x, and 101x, respectively.
Geojit’s financial service offerings
Geojit Financial Services has stated that Netweb Technologies is available at a P/E ratio of 59.7x (FY23) on the upper price band of ₹500, which is considered reasonable compared to competitors.
” Netweb Technologies is well-positioned to contribute to the growth of the Indian IT industry due to its effective management, consistent growth, diversified product portfolio, wide geographical presence, and alignment with the government’s Digital India initiative. Therefore, we provide a ‘Subscribe’ rating for the issue on a short to medium-term basis,” said Geojit Financial Services.
Choice’s broking offerings
Choice Broking expects the company’s topline to grow at a CAGR of 37% from FY23 to FY25, reaching approximately ₹835.4 crores in FY25. The economies of scale are expected to boost EBITDA and PAT margins by 132 basis points and 162 basis points respectively, leading to an increase of up to 17.1% and 12.2% in FY25E.
” Netweb Technologies stands out in the listed space as there is no comparable peer that possesses a similar business model and product offering. It is demanding a P/E ratio of 59.7x (based on its earnings for the financial year 2023), which appears high at a premium level. However, considering the medium-term business capacity and earnings growth, we believe that the valuation demanded is reasonable,” said Choice Broking.
Therefore, they have provided a “Subscribe” rating for this issue.
Also read : Netweb Technologies IPO details
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