Bumper Listing: Netweb Technologies Debuts at 89% Premium!

On July 27, Netweb Technologies had a remarkable market debut, opening its first day of trading with an impressive 89% premium. The stock made its debut at Rs 947, showing an impressive increase of 89.4% in comparison to its final issue price of Rs 500 per share on the NSE. Simultaneously, on the BSE, the stock opened at Rs 942, indicating a substantial rise of 88.4%. 

This surge was in line with expectations, driven by the company’s robust IPO subscription numbers and the prevailing optimism in the equity markets. 

As of writing the article, the stock is trading at Rs 907.50, up by Rs 407.50 or 81.50% from its final issue price of Rs 500 on the BSE. The current market capitalisation of the company is Rs 5085.09. 

The IPO of the company was opened on July 17 and ended on July 19. If we examine the subscription history then, the public issue of Netweb Technologies received an astounding response from investors, with a subscription rate of 90.36 times. The qualified institutional buyers displayed unprecedented support for the IPO, oversubscribing by a remarkable 228.91 times. High net-worth individuals also showed great enthusiasm, subscribing 81.81 times their allotted quota, while retail investors oversubscribed by 19.15 times. Even, the portion set aside for employees was oversubscribed by 53.13 times. 

The company has raised Rs 631 crore through its public issue. This offering was a combination of a fresh issue of Rs 206 crore and an offer for sale of Rs 425 crore by the promoters. The public issue was fixed at a price band of Rs 475 to Rs 500 per share. Whereas the final issue price was fixed at Rs 500. The stock has generated an impressive return of 88% on its final issue price. 

The company plans to utilise the net proceeds from the offering for covering the expenses for civil construction costs related to the building that will house the surface mount technology (SMT) line, interior development costs, and the acquisition of machinery and equipment necessary for the new SMT production line. 

Netweb Technologies established in 1999, is a provider of cutting-edge computing solutions (HCS) encompassing a wide range of offerings such as high-performance computing (supercomputing/HPC) systems, private cloud and hyper-converged infrastructure (HCI), AI systems, and enterprise workstations, high-performance storage solutions, and data centre servers, software, and services. 

It specialises in the design, manufacturing, and deployment of HCS, which includes proprietary middleware solutions, end-user utilities, and precompiled application stacks. The company also takes pride in developing its own computing and storage technologies and implementing supercomputing infrastructure to cater to the requirements of businesses, academia, and research organizations. 

The book-running lead managers were Equirus Capital and IIFL Securities, and Link Intime India has been appointed as the registrar of the issue. 

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Given the prevailing market sentiment, if the listing gains exceed 75%, the allotted investors may consider booking profits on the day of listing. However, investors with a higher risk appetite may hold the shares for the medium to long term could be beneficial, to be on the ride. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.