Introduction:
The month of July has been eventful for Indian IPO investors. The launch of a flurry of Initial Public Offerings (IPOs) in the market means that most of them are left confused about which ones they should subscribe to and which to ignore. Another IPO that has been announced to launch in July 2023 is Netweb Technologies IPO.
This IPO is expected to open for public subscription on Monday, 17 July 2023, and close on Wednesday, 19 July. Read to know the finer details of this IPO and the issuing company so you can decide whether it’s worth subscribing.
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About Netweb Technologies:
Netweb Technologies provides its clients with high-end computing solutions and fully integrated designing and manufacturing capabilities. The offerings of the company include High-Performance Computing (HPC) systems, private cloud, Hyper-Converged Infrastructure (HCI), Artificial Intelligence (AI) solutions, High-Performance Storage (HPS), and Data Centre Servers under the “TYRONE” brand.
Netweb Technologies was incorporated in 1999, and since then, it has successfully installed more than 300 HPCs, 50 private cloud and HCIs, and over 4,000 accelerators or GPU-based AI systems. The company’s client list includes some marquee names across the industries, including Information Technology (IT), Defence, Education, Banking, Financial Services, and Insurance (BFSI) sectors.
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Key Strengths of Netweb Technologies:
- It is one of India’s leading providers of high-end computing solutions with fully-integrated designing and manufacturing capabilities
- The company has a strong relationship with a diverse client base that includes some of the marquee names across the industries
- The company has got more than 20 years of experience under its belt. During this period, it has helped thousands of companies worldwide with a customer-centric approach
- It has a strong Research and Development (R&D) team known for its product development and innovation abilities
Key Risks or Weaknesses:
- The company derives a significant portion of its revenues from its HCS offerings. The other segments, too, need to contribute effectively
- The absence of long-term contracts with the clients can prove to be detrimental to the business
- The company requires a high amount of funding to operate. Plus, any breakdown of machinery may result in considerable losses
- Any breakdown or failure may impact the company’s reputation and, subsequently, the business revenues
Financial Highlights of Netweb Technologies
The table below depicts the key financials of Netweb Technologies Limited for the last three financial years as per the Draft Red Herring Prospectus (DRHP) filed with the market regulator:
| Particulars |
As of and For FY Ending March 31 |
| 2023 |
2022 |
2021 |
| Share Capital |
10 |
6 |
6 |
| Net Worth |
94 |
44 |
22 |
| Total Borrowings |
36 |
34 |
31 |
| Revenue From Operations |
445 |
247 |
143 |
| EBITDA Adjusted |
71 |
76 |
146 |
| Profit After Tax |
47 |
22 |
8 |
| Earnings Per Share (Diluted) |
9 |
4 |
2 |
| Net asset value (In Rs/share) |
18 |
9 |
4 |
| Return on Networth (%) |
68 |
68 |
46 |
*Amount in Crores
Below are a few takeaways from the financials of the company as seen in the table above:
- The company’s revenue has grown rapidly in the last two financial years from Rs. 143 crores to Rs. 445 crores. With the demand for IT solutions picking up in India, this surge is expected to continue
- The company’s profits have also grown consistently from Rs. 8 crores in FY 2021 to Rs. 47 crores in FY 2023
- While revenues and profits have grown at a considerable pace, the total borrowings of the company have remained stable
- The net worth has risen by more than four times between March 2021 and March 2023. This is a testament to the company’s expanding footprints in India
Details of the IPO:
As a retail investor, you can place your bids for the Netweb Technologies IPO between 17 July to 19 July 2023. The IPO consists of a fresh issue of Rs. 206 crores and an offer-for-sale of up to 8.5 million shares by the company’s existing shareholders and promoters. 50% of the offer has been reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Buyers (NIBs), and the remaining 35% for retail investors.
The company has fixed the price band for the IPO between Rs. 475 to Rs. 500 per share. At the upper value, it can raise around Rs. 631 crores from the IPO. You can place your bids for multiple lots with each lot comprising 30 equity shares. The minimum investment that you need to make is Rs. 14,250.
Should you subscribe?
The AI and super-computing sectors are on the rise. Almost every industry these days makes use of technology to increase their efficiency and productivity. Being one of the leading OEMs in India among all HPC and HCI service providers, it makes sense to invest in Netweb Technologies IPO. However, you must analyze the company’s financials and other factors before making any investment decision. In case you need a Demat account to invest in IPOs, you can open it for free with Motilal Oswal.
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