Netweb Technologies IPO Day 2: Check Subscription Status, GMP, Analysis And Other Details Here; Should You Subscribe To The Issue?

After the three-day initial public offering (IPO) of Netweb Technologies gathered a strong response from investors on the first day of bidding all eyes will be on the subscription status of the IPO on day 2, i..e Tuesday (July 18). Netweb Technologies IPO opened for subscription on Monday (July 17). The last day to subscribe to the issue is Wednesday (July 19).

On Monday, Netweb Tech's IPO received 2,06,05,890 bids against the issue size of 88,58,630 shares, according to the BSE data. On the First day, the IPO was subscribed 2.33 times. The portion that was reserved for employees witnessed the maximum support and was subscribed 6.60 times. The NIIs quote was booked 3.61 times, while the allocation for retail individual investors fetched 3 times the total bids. However, the category for qualified institutional buyers (QIBs) was subscribed by just 3%.

Price Band

The company is offering its shares in the price band of Rs 475-500 apiece. At the upper band price, the company is eyeing to raise Rs 631 crore through the public issue. At the upper end of the price band, the valuation of the company is at a P/E of 55-59x.

The company has reserved 50% of the offer for qualified institutional buyers, while Non-Institutional Investors would get 15%. The remaining 35% of the offer is for retail bidders.

Ahead of its IPO, the company raised Rs 189 crore from anchor investors by allocating 37.8 lakh equity shares. 

The offer consists of a fresh issue of shares worth Rs 206 crore and an offer-for-sale of up to 8.5 million equity shares by its existing promoters and shareholders, amounting to Rs 425 crore.

Netweb Technologies intends to utilise the proceeds from the fresh issue to fund capital expenditure requirements worth Rs 32.3 crore, while the remaining portion of funds will be used for funding long-term working capital requirements and repayment of outstanding borrowings.

Lot size

Interested investors can bid for at least one lot of 30 equity shares. Retail investors can apply up to 13 lots.

Things to consider before subscribing to the issue

Netweb obtains a majority portion of its revenues from operations from specified HCS offerings. If there is any loss or decline in the demand for these offerings in the market, it can adversely impact its business, revenue from manufacturing operations and financial health. Meanwhile, the absence of other HCS offerings providers in the market shows that the company lacks competitors which makes it difficult for comparison of performance. Thus, to decide on whether to invest in the offer, investors can just rely on their own examination of the accounting ratios of the company.

Furthermore, Netweb recorded low-capacity utilisation in fiscals 2023, 2022 and 2021. The decline in actual production or inability to constantly achieve higher production could negatively impact its installed capacity utilization.

Latest grey market price (GMP)

According to market observers, Netweb Tech shares last traded at a 75% premium against the upper end of the price band of Rs 500 in the grey market.

The company is offering its shares in the price band of Rs 475-500 apiece. At the upper end of the price band, the valuation of the company is at a P/E of 55-59x.

Netweb Technologies intends to utilise the proceeds from the fresh issue to fund capital expenditure requirements worth Rs 32.3 crore, while the remaining portion of funds will be used for funding long-term working capital requirements and repayment of outstanding borrowings.

Netweb Technologies IPO Price Band 

The company has fixed the price band of Its IPO at Rs 475-500 per share.