The highly anticipated IPO of high-end computing solutions provider Netweb Tech has exceeded expectations, recording an impressive 89% listing gain. The IPO, priced at Rs 500 per share, has entered the stock market at an astounding Rs 942.50. While the share price has slightly softened to Rs 940.45, investors who subscribed to the IPO at a discounted price of Rs 475 are still enjoying an 88% profit per share.
Record-breaking Listing Gain: Netweb Tech’s IPO Surges by 89% on Market Debut
Netweb Tech’s IPO, which raised Rs 631 crore, garnered a strong response from investors during the subscription period from July 17 to 19. Qualified Institutional Buyers (QIBs) subscribed to the IPO a remarkable 220.69 times, while Non-Institutional Investors showed strong interest with a subscription of 83.21 times. Retail Investors subscribed 19.48 times, and Employees Quota was oversubscribed at 55.92 times. The IPO comprised fresh shares worth Rs 206 crore and an Offer for Sale (OFS) of shares worth Rs 425 crore.
The funds raised through the IPO will be utilized for constructing buildings for the company’s Surface Mount Technology (SMT) line, purchasing machinery, interior development, meeting working capital requirements, debt repayment, and general corporate purposes.
IPO Receives Robust Subscription, Oversubscription in Employees Quota
Netweb Tech is a leading OEM in high-end computing solutions, offering supercomputing systems, private cloud, hyper-converged infrastructure (HCI), data center servers, AI systems, and enterprise workstations and HPS (high-performance storage) solutions. The company’s manufacturing facility is located in Faridabad, Haryana, and it provides IT and supercomputing R&D services to government institutions. Notably, two of its supercomputers have made the world’s top 500 list 10 times.
The company’s financial performance has been impressive, with continuous profit growth in recent years. Net profits increased from Rs 3.91 crore in FY 2020 to Rs 46.94 crore in FY 2023.
However, potential investors should consider certain risks associated with the investment, including exposure to foreign currency fluctuations, varying capacity utilization in recent financial years, revenue dependency on select HCS offerings and top 10 customers, and potential business impact due to reduced customers in key application industries. Additionally, working capital needs may affect operations if sufficient funds cannot be raised.
