Netweb Technologies IPO: Is an impressive debut on the cards for June 27?

On its listing day, July 27, Netweb Technologies, which offers high-end computer solutions, is expected to perform exceptionally well. Credit significant demand for its initial public offering (IPO), solid financials with increased operating margins, and a concentration on the high-end computing solutions market niche for this success. The issue price per share was Rs 500, and analysts predict that the listing price might fetch a premium of 70-85% over that.

Further bolstering mood in the primary market was the robust equities market circumstances brought on by FII inflow.

Qualified institutional buyers (QIB) led the way in the 90.36 times oversubscribed IPO of Netweb Technologies that took place on July 17-19. QIBs have shown the highest level of participation to date, purchasing 228.91 times the allotment.

Employees subscribed at a rate of 53.13 times, retail investors at 19.15 times, and high-net-worth people at 81.81 times.

We anticipate a robust listing of the issue on the bourses tomorrow because the IPO for Netweb Technologies was 90 times oversubscribed. Dhruv Mudaraddi, a research analyst at StoxBox, predicted a premium of 70 percent or more when the shares were listed compared to the issue price of Rs 500 per share.

The company's laser-like concentration on the high-end computing solutions (HCS) market, which has substantial barriers to entry, has undoubtedly contributed to the enthusiastic response. The strong response can also be attributed to the company's investment in R&D to improve its product lineup and its expansion into existing market niches.

In addition, the company's revenue has increased by over 3 times and its profit has increased by nearly 6 times between FY21 and FY23, all while maintaining an ever-improving margin profile.The organisation has a stable clientele consisting of well-known names from several industries. Over time, it has attracted customers from a wider range of industries, including the IT and IT-enabled service industries, the media and entertainment industry, the BFSI sector, national data centres, and government agencies.

It has also branched out into new product lines, including network switches and 5G ORAN equipment, both of which are essential to the operation of data centres for enterprise IT and telecommunications networks in order to support the rollout of 5G services.

Analysts estimated that the grey market premium for Netweb IPO shares was between 75% and 80% due to the high demand for the offering. IPO shares can be bought and sold in the grey market, an unofficial market, before the listing is made public.

To estimate a realistic asking price, most investors examine premiums in the grey market.

According to Swastika Investmart equity research analyst Anubhuti Mishra, "the grey market premium suggests that the listing price could be around Rs 894," which is a 78% premium over the IPO price of Rs 500 per share.

She continued by explaining that the fact that Netweb offers premier IT services in India merits the company a higher price tag. The firm's order book has grown substantially, from Rs 48.56 crore in FY21 to Rs 90.2 crore in FY23.

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She thinks Netweb Technologies is positioned to do well as India's high-end computer market expands.

Hem Securities' Senior Research Analyst Astha Jain is similarly optimistic about Netweb's offering, predicting a strong performance at an 85% premium to the issue price.

Just last week, Netweb Technologies completed a public issue that brought in Rs 631 crore. Each share was offered between 475 and 500 rupees.

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