Netweb Technologies IPO Commences Today; Analyze Grey Market Premium and Other Details Here. Should You Consider Applying?

Netweb Technologies IPO GMP Today marks the opening of the initial public offering (IPO) for Netweb Technologies India, a prominent provider of computing solutions. This IPO presents an opportunity for public subscription starting from July 17 and will be available for a three-day period, concluding on July 19. The IPO comprises a fresh issue of shares valued at ₹206 crore, along with an offer-for-sale of up to 85 lakh shares by existing promoters and shareholders.

The company has set the price range for the public offering at ₹475-500 per share. With this pricing, Netweb Technologies anticipates raising ₹631 crore through the IPO.

Upon the completion of the public offer, the shares of Netweb Technologies will be listed on the BSE and NSE stock exchanges on July 27.

For interested investors, the lot size for the Netweb Technologies IPO is 30 shares, and retail investors have the opportunity to apply for up to 13 lots.

Netweb Technologies India Ltd.

Netweb Technologies India Ltd. specializes in High-end Computing Solutions (HCS) and caters to various sectors, including IT, IT-enabled services, entertainment, media, BFSI, national data centers, and government entities.

The company operates a manufacturing facility in Faridabad, Haryana, and has established 16 offices throughout India. NTIL’s three supercomputers have been consistently ranked among the world’s top 500 supercomputers on 11 occasions.

Prior to the IPO, the company raised ₹51 crore through a pre-IPO placement at an issue price of ₹500 per share. Prominent institutional investors such as LG Family Trust and Anupama Kishore Patil participated in this placement.

Fiscal Year 2023 for Netweb Technologies India

In the fiscal year 2023, Netweb Technologies witnessed a remarkable 80% year-on-year increase in revenue, amounting to ₹445 crore compared to the previous year’s ₹247 crore. Concurrently, the net profit doubled to ₹47 crore from ₹22.5 crore during the same period. The company’s EBITDA margins expanded to 15.7% in FY23 from 10.1% in FY21.

Netweb Technologies IPO GMP Today

Market observers report that the grey market premium for Netweb Technologies IPO gmp today stands at ₹365 per share. This implies that the shares of Netweb Technologies are currently trading at a premium of ₹365 per share in the unlisted market.

Considering the IPO price and the current GMP, it is projected that Netweb Technologies shares will be listed at ₹865 apiece on the exchanges, presenting a substantial premium of 73%.

Netweb Technologies IPO – Is it Worth Subscribing?

Given the business potential, earnings growth, and reasonable valuations, most analysts recommend a “Subscribe” rating for the Netweb Technologies IPO.

Geojit Financial Services

Geojit Financial Services states that at the upper price band of ₹500, Netweb Technologies boasts a price-to-earnings (P/E) ratio of 59.7x based on FY23 earnings. This valuation appears reasonably priced in comparison to industry peers.

Geojit Financial Services adds, “With effective management, consistent growth, an expanding product portfolio, geographic footprints, and the Digital India initiative by the Government, Netweb Technologies is well-positioned to capitalize on the growth of the Indian IT industry. Therefore, we assign a ‘Subscribe‘ rating for the issue on a short to medium-term basis.”

Choice Broking

Choice Broking predicts that the company’s top-line is expected to achieve a 37% compound annual growth rate (CAGR) over FY23-25, reaching ₹835.4 crore in FY25. They anticipate that economies of scale operations will expand the EBITDA and PAT margin by 132 basis points and 162 basis points, respectively, resulting in a 17.1% EBITDA margin and a 12.2% PAT margin in FY25.

Choice Broking comments, “There are no comparable peers in the listed space having a business model and product offerings similar to Netweb Technologies.

At the higher price band, it is demanding a P/E multiple of 59.7x based on its FY23 earnings, which seems to be on the higher side. However, considering the business potential and earning growth in the medium term, we believe the demanded valuation is reasonable.”

Therefore, Choice Broking assigns a “Subscribe” rating for the issue.

Marwadi Shares and Finance

Marwadi Shares and Finance also assigns a “Subscribe” rating to the Netweb Technologies IPO. They highlight that the company holds a dominant position as one of India’s leading HCS providers in a rapidly evolving and technologically advanced industry with high entry barriers.

“This advantageous position is further reinforced by the company’s impressive track record of financial performance and consistent growth. Additionally, it is available at a reasonable valuation compared to its peers.”

The brokerage firm states

They note that considering the FY23 earnings per share (EPS) of ₹8.37 on a post-issue basis, the company is expected to list at a P/E of 59.72x with a market cap of ₹28,032 million. In comparison, peers such as Syrma SGS Technology, Kaynes Technology India Ltd, and Dixon Technologies Ltd are trading at P/E multiples of 72x, 106x, and 101x, respectively.

In conclusion, the Netweb Technologies IPO presents an opportunity for potential investors to participate in a company with strong growth prospects, backed by its notable presence in the HCS sector and impressive financial performance.