Netweb Technologies IPO: All You Need To Know

Netweb Technologies India Ltd. will launch its initial public offering on July 17. The supercomputer systems manufacturer plans to raise Rs 631 crore via a fresh issue and an offer for sale.

The fresh issue will consist of equity shares aggregating Rs 206 crore, and the OFS includes 85,00,000 shares. The price band is fixed in the range of Rs 475–500 per share.

The New Delhi-headquartered company has already undertaken a pre-IPO placement of 10,20,000 equity shares at an issue price of Rs 500 per equity share, aggregating Rs 51 crore.

Out of the total IPO size, 50% is reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% is to be allotted to retail individual investors. The business has set aside up to 20,000 equity shares under the IPO for subscription by eligible employees.

• Issue opens: July 17.

• Issue closes: July 19.

• Fresh Issue size: Rs 206 crore.

• OFS size: Rs 425 crore.

• Face value: Rs 2 apiece.

• Fixed price band: Rs 475–500 per share.

• Minimum lot size: 30 shares.

• Maximum lot size: 1,95,000 shares

• Listing: NSE, BSE.

The pre-IPO shareholding stands at 5,19,43,980 and will change to 5,60,63,980 after the IPO.

Chairperson Sanjay Lodha, one of the promoters taking part in the sale, will sell up to 28,60,000 equity shares. Whole-Time Directors Navin Lodha, Vivek Lodha and Niraj Lodha will offload 14,30,000 equity shares each. Additionally, 1,350,000 equity shares, held by Ashoka Bajaj Automobiles LLP, will also be sold.

The provider of server, storage, and high-performance computing solutions caters to both domestic and international clients.

Their HPC offerings comprise of private clouds, hyper-converged infrastructure, AI systems, business workstations, high-performance storage solutions, data-centre servers, as well as software services. The company is one of India's leading original equipment manufacturers in the space of HCS providing supercomputing systems.

The end-user industries served by Netweb Technologies include information technology, IT-enabled services, entertainment and media, banking, financial services and insurance, national data centres, government entities, including the defence industry, and institutions of higher learning, and research and development.

The funds raised will be employed for the following purposes:

• Funding capital-expenditure requirements for new surface-mount technology line's civil construction and machinery purchases.

• Funding long-term working-capital requirements.

• Repayment or pre-payment, in full or in part, of outstanding borrowings.

• General corporate purposes.

• The company is heavily reliant on its top 10 customers, which contributed 57.80% of the revenue in the last financial year.

• It doesn't enter into long-term contracts with customers, exposing them to risks related to customer retention.

• The majority of the revenue is derived from supercomputing systems and private cloud hyper-converged infrastructure segments. Any loss or decline in demand of the offerings may result in an adverse effect on the business, revenue from manufacturing operations, and financial condition.

• The firm does not have any comparable listed peer companies domestically or internationally.

• It had low capacity utilisation in fiscals 2023, 2022, and 2021. A reduction in actual production or an inability to consistently achieve higher production could adversely affect the utilisation of the installed capacity.

• Part of the IPO's net proceeds will be used for capital expenditure requirements for the civil construction of the building and machinery purchases for the company's new SMT line. If the costs of construction, unanticipated delays in implementation, and cost overruns related to the upgrade are higher than expected, it could have a material effect on the financial condition, results of operations, and growth prospects.

Watch | IPO Adda with Netweb's Sanjay Lodha