Orient Technologies IPO subscribed 86x on Day 3 so far; HNI portion booked over 211 times

The initial public offering (IPO) of Orient Technologies continued to attract a strong response from the investors during the second day of the bidding process as QIBs joined the party along with retail and HNI investors of the issue. The issue was booked about 6.65 times on the first day of the bidding and ended day two with about 17 times subscription.
 

The Mumbai-based Orient Technologies is selling its shares in the price band of Rs 195-206 apiece. Investors can apply for a minimum of 72 shares and its multiples thereafter. It is looking to raise Rs 214.76 crore via IPO, which includes a fresh share sale of Rs 120 crore and an offer-for-sale (OFS) of 46 lakh equity shares.
 

According to the data, the investors made bids for 63,77,02,992 equity shares, or 85.6 times, compared to the 74,49,846 equity shares offered for the subscription by 2.30 pm on Friday, August 23. The three-day bidding for the issue, which kicked off on Wednesday, August 21, concludes today.
 

The allocation for non-institutional investors (NIIs) was subscribed 211.37 times, while the portion reserved for retail investors saw a subscription of 53.50 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was 46.01 times as of the same time.
 

Incorporated in 1997, Mumbai-based Orient Technologies is a fast-growing information technology (IT) solutions provider. Orient Technologies offers a wide range of customized offerings and its ability to tailor solutions to meet customers' specific needs has enabled it to attract prominent clients across various industries.
 

The grey market premium of Orient Technologies has seen a mild correction amid the rising volatility in the broader markets. Last heard, the company was commanding a premium of Rs 60 per share in the unofficial market, suggesting a listing pop of about 30 per cent for the investors. However, the premium in the grey market stood around Rs 70 a day ago.
 

Brokerages are mostly positive on the issue suggesting investors to subscribe to it for a long term. They are positive on its experience management, strong financials, long term relationship with existing clients, asset light model and expansion plans in DaaS model. However, business in only India, rising competition and reliance on select names are the key concerns for the company.
 

Orient Technologies is valued at FY24 P/E multiple of 20.7 times at the upper price band. The fundamentals of the company look decent with a healthy CAGR of 13.6 per cent, 11.3 per cent and 9.8 per cent in revenue, Ebitda and PAT over FY22-24 period, said SBI Securities in IPO note.
 

"The company’s diversified end-user industry profile, comprehensive product & service offerings and technology partnership with big players will help in sustainable growth for the company. However, we believe the company faces high competition in the fragmented industry. We recommend subscribing to the issue for a long-term investment horizon," it added.
 

Ahead of its IPO, Orient Technologies raised Rs 64.43 crore from anchor investors by allocating them 31,27,572 shares for Rs 206 apiece. 50 per cent for the net offer has been reserved for qualified institutional bidders, while non-institutional investors will get 15 per cent of the net offer. Retail investors will have 35 per cent of the net offer allocated for them.
 

Orient Tech's financial performance is expected to be driven by an expansion of its product and service portfolio, a larger global footprint, and long-term relationships with clients. The issue is valued at a P/E multiple of 20.7 times its FY24 post-IPO EPS of Rs 9.95, which is considered fair in comparison to its rivals," said Ajcon Global with a ‘subscribe' recommendation for the issue.
 

Elara Capital (India) is the book running lead manager of the Orient Technologies IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE, with Wednesday, August 28 as the tentative date of listing at the bourses.