Netweb Technologies IPO (Day 3): Issue subscribed 90.36 times; QIB portion booked 228.91x; check latest GMP, other details

The initial public offering (IPO) of Netweb Technologies India received stellar response from investors. The three-day initial share sale got a total of 90.36 times subscription, BSE data showed. As on Wednesday, Netweb Tech's IPO received 80,04,52,380 bids compared to the issue size of 88,58,630 shares, as per BSE data. The Rs 631-crore IPO was sold in the range of Rs 475-500 apiece with a lot size of 30 equity shares and in multiples thereafter. The primary stake sale concluded today.

The portion reserved for qualified institutional buyers (QIBs) got the maximum push on the final bidding day and was subscribed 228.91 times. The category kept for non-institutional investors (NIIs) was booked 81.81 times. The quotas for employee and retail investor fetched 53.13 times and 19.15 times, respectively, of the total bids.

The IPO craze is back at Dalal Street this year after a weak show in 2022. Before Netweb's bumper subscription, IdeaForge Technology and Utkarsh Small Finance Bank (SFB) also saw massive bookings. IdeaForge Tech was booked 106.06 times last month and Utkarsh SFB was subscribed 101.91 times.

Grey market price (GMP)

In the grey market, Netweb Tech shares were last seen trading at a premium of 72.60 per cent against its issue price of Rs 500 (higher end). The stock is expected to get listed on July 27.

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."

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.

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