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  • Writer's pictureJatin Agarwal

Netweb Technologies IPO


Netweb Technologies Logo

Company and IPO Overview:


Netweb Technologies India Limited was founded in the year 1999. It is a prominent provider of high-end computing solutions (HCS) with fully integrated design and manufacturing capabilities. Their HCS services encompass a range of offerings, including high-performance computing (HPC) systems, private cloud and hyper-converged infrastructure (HCI), AI systems and enterprise workstations, high-performance storage (HPS), data centre services, and software and services for HCS offerings.


Netweb Technologies is one of the major OEMs in India with a significant number of HPC installations. As of February 28, 2023, they have successfully deployed over 300 supercomputing systems, over 50 private cloud and HCI installations, more than 4,000 accelerator/GPU-based AI systems and enterprise workstations, and HPS solutions with impressive throughput storage capabilities of up to 450 GB/sec.

Netweb Technologies serves prestigious customers across various industries such as information technology, information technology-enabled services, entertainment and media, banking, financial services and insurance (BFSI), national data centres, government entities including the defence sector, and education and research institutions. Their clients include renowned organizations like IIT Jammu, IIT Kanpur, NMDC Data Centre Private Limited, Airamatrix Private Limited, Graviton Research Capital LLP, Institute of Nano Science and Technology, HL Mando Softtech India Private Limited, Dr Shyam Prasad Mukherjee International Institute of Information Technology, Naya Raipur, Jawaharlal Nehru University, Hemvati Nandan Bahuguna Garhwal University, Akamai India Networks Private Limited, A.P.T. Portfolio Private Limited, and Yotta Data Services Private Limited.


Furthermore, Netweb Technologies also caters to the requirements of an Indian Government space research organization and an R&D organization under the Ministry of Electronics and Information Technology, Government of India, involved in R&D activities related to information technology, electronics, and Supercomputing.


In order to meet the increasing computational demands of businesses, academia, and research organizations, the company develops homegrown compute and storage technologies under India's National Supercomputing Mission.

Supercomputers supplied by Netweb Technologies have gained recognition by being listed 10 times in the esteemed ranking of the world's top 500 supercomputers.


Netweb Technologies offers HCS services encompass a range of offerings, including high-performance computing (HPC) systems, private cloud and hyper-converged infrastructure (HCI), AI systems and enterprise workstations, high-performance storage (HPS), data centre services, and software and services for HCS offerings.


After a series of successful IPO’s Netweb Technologies IPO is the next main board IPO which is ready to set its footprints in the stock market and the company is about to raise around ₹ 631 crores via IPO comprising fresh issue of ₹ 206 crores and Offer For Sale up to ₹425 crores only. The price band of the issue is ₹ 475 to ₹ 500 with a minimum market lot of 30 shares. Netweb Technologies India IPO subscription quota is 35.00%, NII is 15.00% and QIB is 50.00%.


The company is also allowing and employee discount of ₹32 per share.


Financials (rounded off):

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2021

144

8

31/03/2022

248

22

31/03/2023

445

47


Objectives of the Issue:

1. 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),

2. Funding of long-term working capital requirements,

3. Repayment or pre-payment, in full or in part, of certain outstanding borrowings.


IPO Details:

IPO Date

17/07/2023-19/07/2023

Face Value

₹2 per share

IPO Price Band

₹475-₹500 per share

IPO Lot Size

30 Shares

Listing at

NSE, BSE

Basis of Allotment

24/07/2023

Credit of Shares in Demat

26/07/2023

Listing Date

27/07/2023

Pre-Issue Shareholding

97.8%

Post-Issue Shareholding

75.45%

Retail Minimum Lot Size

30 shares (₹15,000)


Valuations & Margins:

Indicators

FY 21

FY 22

FY 23

EPS

1.62

4.41

9.22

P/E

-

-

59.67

EBITDA (%)

11.13

14.37

15.89

Debt/Equity

1.31

0.73

0.3

ROCE (%)

35.54

51.63

65


Important things to note about the Company:


Top reasons to consider the IPO:


1. Netweb Technologies is India's one of the leading Indian-origin owned and controlled OEM for HCS with integrated design and manufacturing capabilities.


2. Netweb Technologies has an established and enduring relationship with a prestigious and varied customer base.


3. Financials show a significant increase in its reserves every year with the reserves standing at ₹83.48 Crores as of March 2023. Good reserves in the company reflect the company’s financial stability and ability to withstand unforeseen expenses.


4. Similarly, its revenue has also increased from ₹144.29 crores in March 2021 to ₹445.65 crores in March 2023. The net profit of the company has also tripled from ₹8.23 Crores in March 2021 to ₹46.94 with a net profit margin currently standing at 10.55%.


Risk factors to watch out in the IPO:


1. Heavy reliance on the top 10 customers, a substantial portion of the orders comes from government-related entities, which award contracts through a tender process, Failure to successfully bid for these contracts or requirement to lower the bid value could have an adverse effect on the company’s revenue.


2. Capacity utilization of the company was low in fiscal years 2023, 2022, and 2021. Reduced output or inability to consistently achieve higher production could have a negative impact on installed capacity utilisation.


3. The company earns the majority of its revenues from a select few of our HCS offerings. Loss or decline of these offerings can adversely affect the revenues of the business.


4. In terms of our foreign currency exposure, the company does not engage in hedging transactions. Any losses resulting from foreign currency exchange rate fluctuations may have a negative impact on its business, results of operations, and financial position.


Crisp Insights:

  • Netweb Technologies IPO GMP Today: The Company is commanding a strong GMP of around ₹320.

  • Netweb Technologies IPO Review: Listing gains possible as per GMP data.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.



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1 Comment


Soumya Naskar
Soumya Naskar
Jul 19, 2023

Good n Crisp analysis update gmp.

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