Orient Technologies IPO: The public subscription for the initial share sale of Orient Technologies Ltd, an information technology solutions provider, will start today (Wednesday, August 21) and end on (Friday, August 23). The IT solutions provider based in Mumbai, has raised ₹64.43 crores from anchor investors prior to its initial public offering. The price band for Orient Technologies IPO has been set at ₹195 to ₹206 per equity share with a face value of ₹10.
The public issue of Orient Technologies has reserved 50% of the shares for qualified institutional buyers (QIB), allotted 15% for non-institutional investors (NII), and set aside 35% of the offer for retail investors.
The share allocation basis for the Orient Technologies IPO is expected to be finalised by Monday, August 26th. Refunds will be processed starting on Tuesday, August 27th, and the shares will be deposited into the allottees' demat accounts on the same day as the refund. It is anticipated that the share price of Orient Technologies will be listed on BSE and NSE on Monday, January 29th.
Founded in 1997, the company specialises in providing information technology (IT) solutions. Our expertise lies in IT Infrastructure, IT Enabled Services (IteS), Cloud, and Data Management Services, which they have developed over the years to deliver products and solutions.
The price to earnings ratio based on diluted EPS for 2024 at the higher range of the price band is 17.46 times, as indicated in an advertisement on Business Standard. This is in comparison to the average industry peer group PE ratio of 29.87 times, as per the same source.
The P/E ratios of the company's listed peers are as follows: Dynacons Systems & Solutions Ltd has a P/E of 29.47, HCL Technologies Ltd has a P/E of 26.93, Wipro Ltd has a P/E of 23.39, LTIMindtree Ltd has a P/E of 34.56, Allied Digital Services Ltd has a P/E of 26.05, Dev Information Technology Ltd has a P/E of 29.01, Tech Mahindra Ltd has a P/E of 55.17, and Silicon Rental Solutions Ltd has a P/E of 14.41.
On the first bidding day, the public issue has been subscribed to 6.65 times, the retail portion of the book build issue was booked 10.50 times, the NII segment was subscribed 6.17 times, and the QIB portion is booked 2%, as per BSE data.
As per Research Analyst Prathamesh P Masdekar from StoxBox, the company mainly operates in India and generates most of its revenue from India. Although they serve numerous multinational companies and have a presence in Singapore, they have not made substantial expansions in their international operations. The Indian IT Services industry is largely focused on exports, with 85% of total revenue coming from exports, and North America and Europe are important geographical markets.
"The company demonstrated consistent Rev/EBITDA/PAT growth at a compound annual growth rate (CAGR) of 13.7%/12.9%/11.2% during FY2022-24 period, respectively. The company has experienced sustained growth in financial performance commensurate with the broadening of its product range and increased customer base.
As we advance, Orient Technologies' financial performance is likely to be driven by expanding its product and services portfolio, increasing its global footprint, long-term relationships with customers and collaboration with technology partners, thereby heightening its ability to design and innovate products and provide solutions tailored to specific customer requirements. The issue is valued at a P/E of 20.7x on the upper price band based on FY24 earnings, which is deemed fair compared to its peers. Therefore, we recommend a SUBSCRIBE rating for the issue," advised Masdekar.
The brokerage claims that the business has lately dabbled with "Device as a service (DaaS)". In line with the "pay-per-use" model, or subscription-based pricing structure, the firm will provide desktops, laptops, tablets, printers, scanners, cellphones, and servers along with managed services packaged with software. The organization intends to broaden its consumer base internationally and increase its geographic reach. The firm is primarily involved in the trade of computer equipment, including servers, storage, and network devices, and it has already established a branch in Singapore. Those who are interested in investing can make medium- to long-term investments in the IPO.
Orient Technologies IPO, which is worth ₹214.76 crore, comprises a fresh issue of ₹120 crore, and an offer-for-sale (OFS) of 46 lakh equity shares by the promoters.
Ajay Baliram Sawant, Umesh Navnitlal Shah, Ujwal Arvind Mhatre, and Jayesh Manharlal Shah are the ones offloadingshares in the OFS.
The company plans to use the net proceeds for general company purposes, including capital expenditure requirements, and the purchase of an office building in Navi Mumbai.
The Orient Technologies IPO's book running lead manager is Elara Capital (India) Private Limited, and the issue's registrar is Link Intime India Private Ltd.
Orient Technologies IPO grey market price is +30. This indicates Orient Technologies share price were trading at a premium of ₹30 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Orient Technologies share price was indicated at ₹236 apiece, which is 14.56% higher than the IPO price of ₹206.
Today's IPO GMP is showing an upward trend based on the grey market activities of the last 13 sessions, indicating a strong listing. According to analysts at investorgain.com, the GMP has ranged from a low of ₹0 to a high of ₹55.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
