Netweb Technologies IPO: Issue subscribed 9.14 times on Day 2; all portions fully booked; details here
Netweb Technologies IPO: On Tuesday, Netweb Tech's IPO received 8,09,39,130 bids compared to the issue size of 88,58,630 shares, as per BSE data. The Rs 631-crore initial share sale is being sold in the range of Rs 475-500 apiece with a lot size of 30 equity shares and in multiples thereafter. The three-day stake sale, which kicked off on July 17, would conclude tomorrow (July 19)
- Jul 18, 2023,
- Updated Jul 18, 2023 6:59 PM IST
The initial public offering (IPO) of Netweb Technologies India continued to witness strong response from investors on the second day of bidding (Day 2), driven by huge demand in non-institutional investor (NII) and employee reserved categories. On Tuesday, Netweb Tech's IPO received 8,09,39,130 bids compared to the issue size of 88,58,630 shares, as per BSE data. The Rs 631-crore initial share sale is being sold in the range of Rs 475-500 apiece with a lot size of 30 equity shares and in multiples thereafter. The three-day stake sale, which kicked off on July 17, would conclude tomorrow (July 19).
On Day 2, the IPO was subscribed 9.14 times with all the categories getting fully booked. The portions reserved for NIIs and employees saw the maximum push today and were subscribed 18.09 times and 16.58 times, respectively. The quota for retail investors was booked 8.77 times, whereas the allocation for qualified institutional buyers fetched 2.66 times of the total bids.
A majority of the brokerages were positive on the issue, citing its strong business fundamentals, robust balance sheet and reasonable valuations compared to its peers.
Reliance Securities said, "In view of strong in-house capabilities, healthy financials, foray into new product-lines, multiple end user industries and marquee customers and strong growth prospects, we recommend 'Subscribing' to the issue."
Nirmal Bang also assigned a 'Subscribe' tag. "Netweb is able to generate high EBITDA margins and ROCE. There are no directly comparable peers in the listed space who are present in the HCS industry," it stated.
Yash Kukreja, Research Analyst at Mehta Equities, said, "On a valuation basis, Netweb Tech's higher price band demands a P/E multiple of 59.7x (on its FY23 earnings), which appears to be on the higher side due to the company's niche product segment of private cloud services and its advantageous position as a first mover in the listed space, which commands a premium. We believe such businesses would get strong demand in the IPO offer. Hence, we recommend investors to 'Subscribe for listing gains' only."
Grey market price (GMP)
In the grey market, Netweb Tech shares were last seen trading at a premium of more than 70 per cent against its issue price of Rs 500 (higher end).
Ahead of its IPO, the company raised Rs 189 crore from anchor investors by allocating 37.8 lakh equity shares at Rs 500 per share. Nomura Funds, Goldman Sachs Funds, ICICI Prudential Mutual Fund (MF), HDFC MF, WhiteOak MF and Nippon MF were among those participated in the anchor round.
The company has reserved 50 per cent of offer for QIBs, while NIIs would get 15 per cent. The remaining 35 per cent of the offer is for retail bidders.
Equirus Capital and IIFL Securities are to book-running lead managers to the issue, while Link Intime India has been appointed as the registrar. Shares of Netweb Tech would be listed at both BSE and NSE.
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The initial public offering (IPO) of Netweb Technologies India continued to witness strong response from investors on the second day of bidding (Day 2), driven by huge demand in non-institutional investor (NII) and employee reserved categories. On Tuesday, Netweb Tech's IPO received 8,09,39,130 bids compared to the issue size of 88,58,630 shares, as per BSE data. The Rs 631-crore initial share sale is being sold in the range of Rs 475-500 apiece with a lot size of 30 equity shares and in multiples thereafter. The three-day stake sale, which kicked off on July 17, would conclude tomorrow (July 19).
On Day 2, the IPO was subscribed 9.14 times with all the categories getting fully booked. The portions reserved for NIIs and employees saw the maximum push today and were subscribed 18.09 times and 16.58 times, respectively. The quota for retail investors was booked 8.77 times, whereas the allocation for qualified institutional buyers fetched 2.66 times of the total bids.
A majority of the brokerages were positive on the issue, citing its strong business fundamentals, robust balance sheet and reasonable valuations compared to its peers.
Reliance Securities said, "In view of strong in-house capabilities, healthy financials, foray into new product-lines, multiple end user industries and marquee customers and strong growth prospects, we recommend 'Subscribing' to the issue."
Nirmal Bang also assigned a 'Subscribe' tag. "Netweb is able to generate high EBITDA margins and ROCE. There are no directly comparable peers in the listed space who are present in the HCS industry," it stated.
Yash Kukreja, Research Analyst at Mehta Equities, said, "On a valuation basis, Netweb Tech's higher price band demands a P/E multiple of 59.7x (on its FY23 earnings), which appears to be on the higher side due to the company's niche product segment of private cloud services and its advantageous position as a first mover in the listed space, which commands a premium. We believe such businesses would get strong demand in the IPO offer. Hence, we recommend investors to 'Subscribe for listing gains' only."
Grey market price (GMP)
In the grey market, Netweb Tech shares were last seen trading at a premium of more than 70 per cent against its issue price of Rs 500 (higher end).
Ahead of its IPO, the company raised Rs 189 crore from anchor investors by allocating 37.8 lakh equity shares at Rs 500 per share. Nomura Funds, Goldman Sachs Funds, ICICI Prudential Mutual Fund (MF), HDFC MF, WhiteOak MF and Nippon MF were among those participated in the anchor round.
The company has reserved 50 per cent of offer for QIBs, while NIIs would get 15 per cent. The remaining 35 per cent of the offer is for retail bidders.
Equirus Capital and IIFL Securities are to book-running lead managers to the issue, while Link Intime India has been appointed as the registrar. Shares of Netweb Tech would be listed at both BSE and NSE.
Also Read | Delta Corp stock rises over 4% after minister Rajeev Chandrasekhar's comment on 28% GST on online gaming
Also Read | Mahindra Logistics shares off day's high, settle with 3% gains. Technical views