Netweb Technologies India Ltd IPO - Review, Valuation, GMP & Peer Comparison

Netweb Technologies India Limited - Complete Overview

Netweb Technologies India Limited is founded in the year 1999. It is a prominent provider of high-end computing solutions (HCS) with fully integrated design and manufacturing capabilities.

Their HCS services encompass a range of offerings, including high-performance computing (HPC) systems, private cloud and hyper-converged infrastructure (HCI), AI systems and enterprise workstations, high-performance storage (HPS), data centre services, and software and services for HCS offerings.

The company takes pride in being one of the major OEMs in India with a significant number of HPC installations. As of February 28, 2023, they have successfully deployed over 300 supercomputing systems, over 50 private cloud and HCI installations, more than 4,000 accelerator/GPU-based AI systems and enterprise workstations, and HPS solutions with impressive throughput storage capabilities of up to 450 GB/sec.

Netweb Technologies serves prestigious customers across various industries such as information technology, information technology-enabled services, entertainment and media, banking, financial services and insurance (BFSI), national data centres, government entities including the defence sector, and education and research institutions. Their clients include renowned organizations like IIT Jammu, IIT Kanpur, NMDC Data Centre Private Limited, Airamatrix Private Limited, Graviton Research Capital LLP, Institute of Nano Science and Technology, HL Mando Softtech India Private Limited, Dr Shyam Prasad Mukherjee International Institute of Information Technology, Naya Raipur, Jawaharlal Nehru University, Hemvati Nandan Bahuguna Garhwal University, Akamai India Networks Private Limited, A.P.T. Portfolio Private Limited, and Yotta Data Services Private Limited.

Furthermore, the company also caters to the requirements of an Indian Government space research organization and an R&D organization under the Ministry of Electronics and Information Technology, Government of India, involved in R&D activities related to information technology, electronics, and Supercomputing.

To meet the increasing computational demands of businesses, academia, and research organizations, the company develops homegrown compute and storage technologies under India's National Supercomputing Mission.

The company's supercomputers have gained recognition by being listed 10 times in the esteemed ranking of the world's top 500 supercomputers.

 

What does the company do?

Netweb Technologies India Limited is a leading provider of high-end computing solutions (HCS) that encompasses fully integrated design and manufacturing capabilities.

 

 

Company Products

The company offers HCS services encompass a range of offerings, including high-performance computing (HPC) systems, private cloud and hyper-converged infrastructure (HCI), AI systems and enterprise workstations, high-performance storage (HPS), data centre services, and software and services for HCS offerings.

 

IPO Overview

Netweb Technologies IPO date is scheduled to take place from July 17 to July 19, 2023. The company anticipates listing its shares on both the BSE and NSE exchanges on July 27, 2023.

The Netweb Technologies share price is Rs. 475 to Rs. 500 per share decided by the company, while the face value of the upcoming IPO is Rs. 2 per share.

Regarding the allocation of shares, the IPO has been strategically divided among different investor categories. 

Institutional investors are allocated 50% of the total issue, non-institutional investors receive 15%, and retail investors are allocated 35% of the shares. This ensures a fair and balanced distribution of shares among various investor groups.

 

Netweb Technologies India Limited IPO timetable (Tentative)

EVENTS	DATE
IPO Opening Date	17 JULY 2023
IPO Closing Date	19 JULY 2023
IPO Allotment Date	24 JULY 2023
Refund initiation	25 JULY 2023
IPO Listing Date	27 JULY 2023

 

Netweb Technologies India Limited IPO Details

IPO Opening & Closing Date	17 July 2023 to 19 July 2023
Face Value	Rs. 2 per share
Issue Price	Rs. 475 to Rs. 500 Per Share
Lot Size	30 Shares
Price of 1 Lot	Rs 15,000
Issue Size	12,620,000 Shares  (aggregating up to Rs. 631.00 Cr)
Offer for Sale	8,500,000 shares of Rs. 2 (aggregating up to Rs. [.] Cr)
Fresh Issue	4,120,000 Shares  (aggregating up to Rs. 206.00 Cr)
Employee Discount	Rs. 25 Per Share
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Pvt. Ltd.

 

Netweb Technologies India Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lot
Minimum Lot Investment (HNI)	14 Lot
Maximum Lot Investment (HNI)	66 Lot

 

Netweb Technologies India Limited IPO Reservation

Institution Portion	50%
Non-Institution Portion	15%
Retail Portion	35%

 

Company Financial

Amount in Crores

Period	FY 21	FY 22	FY 23
Total Assets	110.20	148.61	265.95
Total Revenue	144.29	247.94	445.65
Net Profit	8.23	22.45	46.94
Net Worth	21.82	44.37	93.67
Reserve & Surplus	16.15	38.71	83.48
Total Borrowings	30.54	34.48	35.60

 

Revenue from Operations Bifurcated into Application Industries

Amount in Millions

Application Industry	FY 22	FY 21
Higher Education and Research	1,409.48	597.62
Space and Defence	262.90	128.63
IT & ITES	526.24	426.60
Others	271.71	275.02
Total	2,470.33	1,427.87

 

Revenue from Operations Business Verticals 

Amount in Millions

Business Verticals	FY 22	FY 21
Supercomputing System	1,030.02	138.75
Private Cloud and HCI	478.82	405.41
AI Systems and Enterprise Workstations	243.12	145.65
HPS Solutions	216.79	336.16
Data Center Server	241.19	168.24
Software and Services for our HCS Offerings	68.55	24.97
Spare and Others	191.84	208.69
Total	2,470.33	1,427.87

 

Objective of the Issue

The company is utilizing funds to achieve the following objectives:

• Utilizing funds for capital expenditure needs, such as the civil construction of the building for the surface mount technology (SMT) line and interior development and purchase of equipment and machinery required for the new SMT production line.
• TO fulfil the long-term working capital requirement.
• Repaying or pre-paying certain outstanding borrowings, either in full or in part.
• General corporate purposes.

 

Promoters and Management of Netweb Technologies India Limited

The company's promoters consist of Mr Sanjay Lodha, aged 51, who serves as the Promoter, Chairman, and Managing Director, Mr Navin Lodha, aged 49, who holds the position of Promoter and Whole-Time Director, Mr Vivek Lodha, aged 46, also acts as a Promoter and Whole-Time Director, and Mr Niraj Lodha, aged 46, serves as a Promoter and Whole-Time Director. These experienced promoters play a pivotal role in driving the company towards new achievements and success.

Pre-issue Promoters Holding	94.89%
Post-issue Promoters Holding	75.45%

 

Peer Comparison

Company Name	Total Income, for Fiscal 2022 (in Rs. Million)	EV/EBITDA	P/E
Netweb Technologies India Limited	2,479.41	N/A	N/A
Syrma SGS Technology Limited	12,843.68	26.35	50.44
Kaynes Technology India Limited	7,103.54	46.44	105.48
Dixon Technologies (India) Limited	1,07,008.90	46.48	91.02

 

IPO's Valuations

As of March 31, 2022, the company had an EPS of Rs. 4.51 per share, RoNW of 67.85%, and NAV of Rs. 8.71 per share. These metrics are used by the company for the valuation of the IPO.

 

Dividend Policy

The company has not paid any dividends in the last three financial years to its shareholders. However, in the future, the company may consider paying dividends, taking into account various factors such as shareholder interests, profitability, and the overall financial condition of the company as stated in the Netweb Technologies India Limited DRHP.

 

IPO's Strengths

• The company is India's one of the leading Indian-origin owned and controlled OEM for HCS with integrated design and manufacturing capabilities.
• Established and enduring relationships with a prestigious and varied customer base.
• Demonstrating strong financial performance and consistent growth.
• Experienced Board of Directors and Management.

 

IPO Weaknesses

• The company depends on the top 10 customers for the majority of its revenue.
• Shared interests and common objectives between the company and a member of their Promoter Group.
• A substantial portion of the orders comes from government-related entities, which award contracts through a tender process.
• Delays in customer payments and receivables have the potential to negatively impact the company's profitability and cash flow.
• A significant portion of the company's revenues come from a limited number of offerings in the HCS sector. A decrease in demand for these offerings could negatively impact the company's overall business, manufacturing operations, and financial stability.
• The company's revenue heavily relies on a few specific Application Industries. If there is a loss of customers in these industries, it could have adverse effects on the company's business, manufacturing operations, and financial health.
• The company has engaged in collaborations with technology partners through various non-disclosure agreements. These agreements involve designing and innovating products and solutions, with many being governed by foreign laws. Failure to adhere to the terms of these agreements could lead to financial consequences and damage the company's reputation.
• The current Order Book value of the company is not necessarily indicative of future growth.

 

 

IPO GMP

As of July 15, 2023, Netweb Technologies India Limited IPO GMP stands at Rs 325.

 

Conclusion

The IPO of Netweb Technologies Limited presents a notable investment opportunity. The company boasts a strong track record of financial performance and consistent growth. Additionally, it holds a leading position among Indian-origin OEMs for HCS, thanks to its integrated design and manufacturing capabilities. These factors combine to make it an attractive investment opportunity. However, it is advisable to thoroughly evaluate all aspects before making any investment decisions to ensure favourable outcomes.

 

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To Read the Prospectus of the Company Click Here to Download the DRHP

 

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