The initial public offering (IPO) of Orient Technologies kicks-off for bidding today, that is, on Wednesday, August 21. The IT solutions provider is selling its shares in the fixed price band of Rs 195-206 apiece. Investors can apply for a minimum of 72 shares and its multiples thereafter. The bids for the issue can be made until Friday, August 23.
Incorporated in 1997, Mumbai-based Orient Technologies is a fast-growing information technology (IT) solutions provider. The company has developed extensive knowledge to create products and solutions for specific areas within its business verticals.
The Rs 214.76 crore IPO of Orient Technologies includes a fresh shares sale of Rs 120 crore and an offer-for-sale (OFS) of up to 46 lakh equity shares by the promoters of the company- Ajay Baliram Sawant, Umesh Navnitlal Shah, Ujwal Arvind Mhatre, Jayesh Manharlal Shah-amounting to Rs 94.76 crore.
The net proceeds from the issue shall be utilized towards acquisition of office premise at Navi Mumbai; funding capital expenditure requirements for purchase of equipment for setting up of network operating centre (NOC) and security operation centre (SOC); purchase of equipment and devices to offer devise-as-a-service (DaaS); and general corporate purposes.
Ahead of its IPO, Orient Technologies raised Rs 64.43 crore from five anchor investors by allocating them 31,27,572 shares for Rs 206 apiece. The anchor investors in the issue include names like Pine Oak Global Fund, Saint Capital Fund, SB Opportunities Fund, Elara Capital (Mauritius), and Rajasthan Global Services.
Orient Technologies offers a wide range of customized offerings and its ability to tailor solutions to meet customers' specific needs have enabled it to attract prominent clients across various industries. They serve leading public and private sector entities in diverse customer industries, such as banking, financial services, insurance (BFSI), IT, ITeS, and healthcare/pharmaceutical.
It specializes in IT infrastructure, IT-enabled services (IteS), and cloud and data management services. The clientele of the company includes Bluechip Corporate Investment Centre, Tradebulls Securities, Vasai Janata Sahakari Bank, Vasai Vikas Sahakari Bank, Integreon Managed Solutions India, Coal India, Mazagon Dock, Joint Commissioner of Sales Tax, Mumbai and D'Décor.
Orient Technologies reported a net profit of Rs 41.45 crore, with a revenue of Rs 606.86 crore for the financial year ended on March 31, 2024. The company had clocked a net profit of Rs 38.3 crore with a revenue of Rs 542.01 crore for the fiscal year 2022-23.
50 per cent for the net offer by Orient Technologies 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.
Elara Capital (India) is the sole 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. Here's what the brokerage firms say about the IPO of Orient Technologies:
Anand Rathi Research Rating: Subscribe Orient Technologies is engaged in IT solutions and related services providing across the business verticals. At the upper price band, the company is valuing at P/E of 20.7 times with a market cap of Rs 858 crore post issue of equity shares and return on net worth of 27.2 per cent, said Anand Rathi Research.
"Its business operations involve technologically advanced solutions for which the company collaborates with a wide range of technology partners including Dell International Services India (Dell) and Fortinet, Inc (Fortinet) and Nutanix Netherlands BV (Nutanix). On the valuation front, we believe that the company is fairly priced," it added with 'subscribe' rating for the issue.
StoxBox Rating: Subscribe The Indian IT Services industry is predominantly export-oriented, with exports accounting for 85% of the total revenue, with North America and Europe being key geographies. It demonstrated consistent revenue, Ebitda and PAT growth at a compound annual growth rate CAGR of 13.7 per cent, 12.9 per cent and 11.2 per cent during FY 22-24, respectively, said StoxBox.
Orient Tech' financial performance is likely to be driven by expanding its product and services portfolio, increasing global footprint, and long-term relationships with customers. The issue is valued at a P/E of 20.7 times on the upper price band based on FY24 earnings, which is deemed fair compared to its peers," it added with a 'subscribe' rating.
Arihant Capital Markets Rating: Subscribe for Long Term Orient Tech is strategically positioned for robust growth with its comprehensive range of IT solutions, encompassing IT Infrastructure, IT Enabled Services (ITeS), and Cloud and Data Management Services. Its recent foray into the device-as-a-service (DaaS) market exemplifies its proactive approach, offering a full suite of hardware and software solutions, said Arihant Capital.
"It is well positioned to tap into regions experiencing rising demand for advanced IT services, leveraging its extensive expertise and established track record. Its diverse customer base and deep proficiency in technologies, supported by strategic alliances with leading technology providers, amplify its ability to meet a wide range of client requirements and capture emerging global market opportunities," it added with a 'subscribe for long-term' tag.
Master Capital Services Rating: Subscribe Orient Technologies offers a wide range and diversified bouquet of products and services ranging from data centre solutions to cloud and data management services. Its recent foray into DaaS will provide desktops, laptops, tablets, printers, scanners, smartphones, and servers, bundled with software, along with managed services on a ‘pay-per-use’ model, said Master Capital.
"The company plans to expand its geographic footprint and cater to a broader customer base globally. The company has already set up a branch in Singapore which is primarily engaged in the business of trading of computer equipment such as servers, storage and network devices. Investor’s looking to invest can invest in the IPO for medium to long term," it added.
Swastika Investmart Rating: Subscribe with Caution Orient Tech boasts a distinguished clientele across diverse industries. The company's comprehensive IT solutions portfolio and consistent financial growth underscore its strong market position. However, reliance on key clients, technology partnerships, and government tenders, coupled with intense competition, presents potential challenges, said Swastika Investmart.
"The IPO is valued at a P/E multiple of 17.45 times, which appears reasonable. After considering all the factors, we recommend a subscribe rating for this IPO, but investors should adopt a cautious approach," it added.