netweb technologies ipo subscription: Netweb Technologies IPO opens for subscription. Should you bid?

The initial public offer (IPO) of high-end computing solutions (HCS) provider Netweb Technologies opened for public subscription on Monday.

The IPO, which closes on July 19, comprises a fresh equity issue of Rs 206 crore and an offer for sale (OFS) of 8.5 million equity shares.

Most analysts advise investors to subscribe to the IPO considering the growth opportunities, strong fundamentals and robust product portfolio.

The company is offering its shares in the price range of Rs 475-500, and at the upper end, the valuation is at a P/E of 55-59x. The IPO will fetch Rs 631 crore at the upper end of the price band.

Netweb Technologies develops homegrown computing and storage technologies, and deploys supercomputing infrastructure to meet the rising computational demands of businesses, academia, and research organisations.

So far, 3 of their supercomputers have been listed 11 times in the world’s top 500 supercomputers.

Analysts say Netweb Technologies presents a unique business model and it is the only domestic company giving HCS offerings, which makes it stand out due to the lack of listed domestic and international players in the field.”At the upper end of the price band, the issue is valued at a P/E of 55.1x based on FY23 earnings which we feel is fairly valued. We, therefore, recommend a “Subscribe” rating for the issue,” BP Wealth said.

For the year ended March 2023, the company clocked a revenue of Rs 445 crore, while its profit stood at Rs 46.9 crore in the same period.

“Though the issue appears lucratively priced based on FY23 performance, the management’s sound understanding of the HCS segment, experienced board and senior management and significant product development are expected to drive growth,” said Investmentz, assigning a subscribe rating to the issue.

Anand Rathi, Ventura and Geojit, too, recommended investors to subscribe to the issue.

About 50% of the net offer is allocated to qualified institutional buyers (QIBs), 15% is reserved for non-institutional investors (NIIs) and 35% for retail investors. Investors can bid for 30 shares in one lot and in multiples thereafter.

Proceeds from the issue will be used for funding its capital expenditure, long-term working capital, and repayment, in full or in part, of debt.

Equirus Capital and IIFL Securities are the book-running lead managers and Link Intime India Private Limited is the registrar for the offer.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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