5 March 2024

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Netweb Technologies IPO

Netweb Technologies IPO To Launch Today. 10 things to consider before investing.

Netweb Technologies, a Delhi-based provider of high-end computing solutions (HCS), intends to conduct its initial public offering (IPO) on July 17. The Netweb Technologies IPO is expected to raise Rs 631 crore for the company. This includes Rs 206 crore in new equity and an offer to sell 8.5 million shares for Rs 425 crore at the top of the price band. The IPO price range has been fixed at Rs 475-500 per share.

Prior to the IPO, Netweb Technologies issued 1,020,000 equity shares at a price of Rs 500 per share (with a face value of Rs 2) for a total of Rs 51 crore. This placement allowed the company to raise funds from select investors prior to the IPO.

Equirus Capital and IIFL Securities are the principal book runners for Netweb Technologies’ IPO. They oversee the IPO process, which includes underwriting, pricing, and marketing the shares to potential investors.

Netweb Technologies IPO is projected to raise substantial capital for the company, which can be utilised for business expansion, R&D, acquisitions, and other corporate reasons.

About the company

Netweb Technologies is a well-known Indian original equipment manufacturer (OEM) that specialises in high-end computing solutions. The company provides advanced technology and products in a variety of segments, including:

Netweb Technologies IPO
  1. Supercomputing Systems: Netweb Technologies offers cutting-edge supercomputing systems with high computational power and performance. These systems are commonly employed in scientific research, weather forecasting, computational fluid dynamics, and other data-intensive applications requiring fast processing.
  1.  Private Cloud and Hyper-converged Infrastructure: The company provides private cloud solutions, allowing businesses to create safe and scalable cloud environments within their existing infrastructure. Netweb Technologies is also an expert in hyper-converged infrastructure, which combines computing, storage, networking, and virtualization into a single system, simplifying management and optimising resource utilisation.
  1.  Data Center Servers: Netweb Technologies supplies strong and dependable data center servers. These servers are built to withstand severe workloads while also ensuring efficient data processing and storage. They are appropriate for organisations with high computational demands, such as major corporations, research institutions, and government bodies.
  1. AI Systems: Netweb Technologies provides artificial intelligence (AI) platforms that enable organisations to capitalise on the power of AI technologies. These systems are designed for machine learning and deep learning activities, allowing organisations to create and deploy AI applications for a variety of use cases such as image identification, natural language processing, and predictive analytics.
  1.  Enterprise Workstations: The company creates high-performance workstations for professionals. These workstations include strong CPUs, plenty of RAM, and advanced graphics capabilities, making them ideal for engineers, designers, content creators, and other professionals who need a lot of computing power.
  1. High-Performance Storage Solutions: Netweb Technologies offers storage solutions that can manage enormous amounts of data while maintaining fast throughput and low latency. These systems are excellent for large-scale data processing organisations such as financial institutions, research labs, and media businesses.

With its complete offering, Netweb Technologies has established itself as a market leader in high-end computing solutions. The company’s solutions serve a wide range of industries, including R&D, university, government, finance, healthcare, and media, enabling organisations to use sophisticated technology for increased efficiency and performance.

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Selling shareholders 

The selling stockholders in the Netweb Technologies IPO are the company’s promoters, Sanjay Lodha, Navin Lodha, Vivek Lodha, Niraj Lodha, and Ashoka Bajaj Automobiles LLP.

  1.  Sanjay Lodha

Sanjay Lodha is one of Netweb Technologies’ promoters. He has played an important role in the company’s growth and strategic direction as a promoter. His participation in the IPO reflects his desire to sell a portion of his stake in the company.

  1.  Navin Lodha

Navin Lodha is another Netweb Technologies promoter. He has most certainly contributed to the company’s growth and success. He will sell a portion of his shares in the company by participating in the Netweb Technologies IPO as a selling shareholder.

  1. Vivek Lodha

Vivek Lodha is a Netweb Technologies promoter who has most likely had a key influence in the company’s operations and success. He will sell a portion of his position in the IPO as a selling shareholder.

  1. Niraj Lodha 

As a promoter, Niraj Lodha was most likely involved in the operations and management of Netweb Technologies. He will sell a portion of his shares in the IPO as a selling shareholder.

  1. Ashoka Bajaj Automobiles LLP

Ashoka Bajaj Automobiles LLP is a selling shareholder in Netweb Technologies’ initial public offering. The acronym LLP stands for Limited Liability Partnership, and it refers to a legal body in which the participants have limited liability. Ashoka Bajaj Automobiles LLP’s participation as a selling shareholder shows that it has a position in Netweb Technologies and has decided to sell some of its shares through the IPO.

Netweb Technologies IPO

The promoters’ and Ashoka Bajaj Automobiles LLP’s choice to sell a portion of their shares through the IPO allows them to realise some of their assets and potentially diversify their holdings. It also enables them to provide market liquidity and perhaps attract new investors to the company.

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The objective of Netweb Technologies IPO

Netweb Technologies provided information on how the funds raised from the IPO will be used:

  • Long-Term Working Capital Requirement: The company intends to set aside Rs 128 crore to support its long-term working capital requirements. This capital will be used to support the company’s continuous operations, meet day-to-day expenses, and ensure the smooth continuation of business activities.
  • Purchase of Equipment/Machinery for Production: Netweb Technologies plans to spend Rs 23.2 crore on equipment and machinery for its new Surface Mount Technology (SMT) production line. SMT is a method of assembling electrical circuit boards that makes use of automated equipment. This investment will assist the company in improving its manufacturing capacity and meeting the increased demand for its products.
  • Repayment of Loans: A portion of the proceeds, totaling Rs 22.5 crore, would be utilised to satisfy existing debts. This allocation is intended to minimise the company’s debt burden and strengthen its financial condition.
  • Construction of SMT Line Building and Interior Development: Netweb Technologies intends to invest Rs 9 crore in the construction of the SMT production line and interior design. This investment will ensure that the infrastructure required to support the new production line is in place, allowing for efficient operations.

These allocations indicate the company’s strategic focus on enhancing its financial structure, developing production capacities, and strengthening its working capital. Netweb Technologies seeks to position itself for long-term growth and fulfil the increasing needs of its clients in the high-end computing solutions market by funding its long-term working capital requirements, investing in equipment and machinery, repaying debt, and improving infrastructure.

Financials:

Netweb Technologies’ sales increased at a compounded annual growth rate (CAGR) of 75% between FY21 and FY23. During the same time period, the company’s profits increased significantly, with a CAGR of roughly 138 percent. Furthermore, the company’s margins have improved, rising from 11 percent to 15 percent.

Netweb Technology Competitors

Netweb Technologies does not have any direct competitors in the Indian or worldwide markets. However, Axis Securities believes that several companies in the electronic manufacturing system (EMS) industry are fairly comparable. Syrma SGS Technology, Kaynes Technology, Dixon Technologies, and others are among them. While not directly comparable to Netweb Technologies, these companies operate in a related industry and can provide some insights for study and comparison.