Netweb Technologies IPO would open for subscription on 17th July, 2023. Company provides high-end computing solutions. Company revenues grew 3 fold in the last 4 years. It’s earnings are improving year on year. In this article we would provide Netweb Technologies India IPO details, financials, objects of the IPO, valuation, review and conclusion.
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Netweb Technologies India IPO Details
We have used Netweb Technologies India RHP as source data for this review and analysis. Here are the IPO details.
| IPO Opening Date | 17-Jul-23 |
| IPO Closing Date | 19-Jul-23 |
| IPO Listing Date | 24-Jul-23 |
| Issue Type | Book Built Issue IPO |
| Face Value | ₹ 2 per equity share |
| IPO Price band | ₹ 470 to ₹ 500 per equity share |
| Lot Size | 30 Shares |
| Min Order Quantity | 30 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | ₹. 631 Crores |
| Fresh issue | ₹. 206 Crores |
| OFS | ₹. 425 Crores |
| QIB shares offered | Not less than 50% of the offer |
| NII/HNI shares offered | Not more than 15% of the offer |
| Retail shares offered | Not more than 35% of the offer |
| Employee Discount | ₹25 Per Share |
About Netweb Technologies India Limited
Company is one of India’s leading high-end computing solutions (HCS) provider, with fully integrated design and manufacturing capabilities.
Its HCS offerings comprises
(i) high performance computing (Supercomputing / HPC) systems;
(ii) private cloud and hyperconverged infrastructure (HCI);
(iii) AI systems and enterprise workstations;
(iv) high performance storage (HPS / Enterprise Storage System) solutions;
(v) data centre servers; and
(vi) software and services for its HCS offerings.
They are one of India’s leading Indian origin, owned and controlled OEM in the space of HCS providing Supercomputing systems, private cloud and HCI, data centre servers, AI systems and enterprise workstations, and HPS solutions. In terms of number of HPC installations, they are one of the most significant OEMs in India amongst others.
How are Netweb Technologies India Limited Financials?
Here are the financials of the company.
| Financial Year ending / Period ending (Amt in Crores) | ||||
| Particulars | FY20 | FY21 | FY22 | FY23 |
|---|---|---|---|---|
| Total Assets | 50.6 | 110.2 | 148.6 | 266.0 |
| Total Revenue | 157.2 | 144.3 | 247.9 | 445.7 |
| Profit After Tax | 3.9 | 8.2 | 22.5 | 46.9 |
| Profit % | 2.49% | 5.70% | 9.05% | 10.53% |
What are the Objects of the IPO?
Netweb Tech IPO size is ₹ 631 Crores. It has both OFS and fresh issue.
1) Offer for sale (OFS) for ₹ 425 Crores: Under OFS, these are sold by selling share holders and proceeds would go to selling share holders and company would not get anything.
2) Fresh issue of ₹ 206 Crores: Funding capital expenditure requirements for civil construction of the building for the surface mount technology (SMT) line and interior development, and purchase of equipment/machinery for the new SMT production line (SMT Line), Funding of long-term working capital requirements, Repayment or pre-payment, in full or in part, of certain outstanding borrowings, and General corporate purposes.
How is Netweb Technologies IPO Price Valuation?
The IPO price band is ₹ 470 to 500 per share.
- If we consider last year FY23 EPS of ₹ 9.07, P/E ratio works out to be 55x
- If we consider Last 3 Years Weighted EPS of ₹ 6.28, P/E ratio works out to be 80x
- The listed peers like Dixon Technologies is trading at P/E 403x (Highest) and Syrma SGS Technology is trading at P/E of 60x (Lowest) and industry average P/E is 80x.
- Hence, the IPO Price band at P/E of 55x to 80x is fully priced.
What is Netweb Technologies India IPO GMP now?
There are several messages over social media claiming the grey market premium is between ₹ 300 to ₹ 350 which is over 60% premium. However, some genuine sources indicate the GMP today is between ₹ 300 to 315 per share.
What are Netweb Technologies IPO Dates?
| IPO Opens on | 17-Jul-23 |
| IPO Closes on | 19-Jul-23 |
| Basis of Allotment | 24-Jul-23 |
| Initiation of Refunds | 25-Jul-23 |
| Credit of Shares to Demat | 26-Jul-23 |
| Listing Date | 29-Jul-23 |
| Cut-off time for UPI mandate confirmation | 19-Jul-23 |
Positive Factors to invest in Netweb Technologies IPO
1) Company is one of the India’s leading Indian origin owned and controlled OEM for HCS with integrated design and manufacturing capabilities with Long standing relationship with a marquee and diverse customer base.
2) Strong revenue and margin growth. Over the four-year period from FY20 to FY23, the company witnessed substantial growth in its total assets, which increased from ₹ 50.6 crores to ₹ 266.0 crores. This growth was supported by a consistent rise in total revenue, reaching ₹ 445.7 crores in FY23, and a significant increase in profit after tax, which more than doubled from ₹ 3.9 crores in FY20 to ₹ 46.9 crores in FY23. Additionally, the profit percentage showed a positive trend, improving from 2.49% in FY20 to 10.53% in FY23.
3) IPO price is reasonably priced compared to its peers.
4) Employees of the company gets ₹ 25 per share discount.
Risk or Negative Factors in Netweb Technologies India IPO
1) Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.
2) Company success is dependent on long-term relationship with its Customers. In particular, they are heavily reliant on its top 10 Customers. They do not, generally, enter into long term contracts with Customers, which exposes us to risks emanating from the inability to retain its established Customers as its clients.
3) They derive a majority portion of its revenues from operations from a select few of its HCS offerings. Loss or decline in the demand of such offerings may result in an adverse effect on its business, revenue from manufacturing operations and financial condition.
4) Its Promoters were involved in certain regulatory proceedings initiated by SEBI which have been settled. Further, one of the members of its Promoter Group is involved in a regulatory proceeding initiated by SEBI.
5) Investors should read all internal and external risk factors from RHP before investing in this IPO.
Also read: Top 10 Stocks recommended by Google AI Bard
Netweb Technologies IPO Review – Conclusion
Investors should consider all positive and negative factors before investing in such IPOs.
Company is one of the India’s leading Indian origin owned and controlled OEM for HCS with integrated design and manufacturing capabilities. It has strong revenue and margin growth in the last 4 years. The IPO price is also fully priced.
On the other side, company would not receive any proceeds from OFS as it goes to selling share holders. Company receives majority of the revenue from few of the HCS offerings which poses risk.
High risk investors who understand all these risk factors can invest in this IPO from medium to long term perspective.
FAQ’s on Netweb Technologies India IPO
#1 – When is Netweb Technologies IPO launch date?
This IPO would open on 17th July and closes on 19th July, 2023
#2 – What is Netweb Technologies ipo gmp today?
The GMP is being traded between ₹ 300 to ₹ 315 per share.
#3 – Is Netweb Technologies India ipo price is high?
Considering the upper price band of the share price, NetWeb IPO Price band at P/E of 55x to 80x which is considered to be reasonably priced.
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