Orient Technologies Limited is set to make its debut on the stock market with an Initial Public Offering (IPO) scheduled for August 28, 2024. As of today, August 26, 2024, the IPO has garnered significant attention from investors. This article will explore the details of the Orient Technologies IPO, including its financials, the company’s background, and what potential investors should know before participating.
Overview of Orient Technologies
Founded in 1997 and headquartered in Mumbai, Maharashtra, Orient Technologies Limited specializes in providing information technology solutions. The company has developed a strong reputation for its expertise in IT infrastructure, cloud services, and data management. Over the years, it has built a diverse portfolio that includes multi-vendor support services, IT facility management, and security services.
Financial Performance
Orient Technologies has shown steady growth in its financial performance. For the fiscal year 2022-23, the company reported a revenue of ₹535.10 crore, up from ₹467.44 crore in the previous year. The profit after tax (PAT) also increased from ₹33.49 crore to ₹38.30 crore during the same period. This upward trend in financial performance indicates a robust business model and effective management.
Details of the IPO
The Orient Technologies IPO is a book-built issue aiming to raise ₹241.76 crore. The IPO will open for subscription from August 21, 2024, and will close on August 23, 2024. The price band for the IPO is set between ₹195 and ₹206 per share, with a minimum lot size of 72 shares.
Key Features of the IPO
- Issue Size: ₹241.76 crore
- Price Band: ₹195 to ₹206 per share
- Minimum Investment: ₹14,832 for retail investors (72 shares at ₹206)
- Allotment Date: Expected on August 26, 2024
- Listing Date: Scheduled for August 28, 2024
- Lead Manager: Elara Capital India Private Limited
- Registrar: Link Intime India Private Limited
Use of Proceeds
The funds raised from the IPO will be utilized for various purposes:
- Acquisition of Office Premises: ₹10.35 crore
- Capital Expenditure: ₹79.65 crore for purchasing equipment for setting up Network Operations Center (NOC) and Security Operations Center (SOC)
- General Corporate Purposes: Remaining funds will be allocated for general business needs.
Subscription Status
As of the first day of the subscription on August 21, 2024, the IPO has received a strong response. The shares were oversubscribed by approximately 6.83 times, indicating high demand among investors. Retail investors showed significant interest, with their portion being oversubscribed 10.92 times.
Subscription Breakdown
- Qualified Institutional Buyers (QIBs): 0.02 times
- High Net Worth Individuals (HNIs): 6.38 times
- Retail Investors: 10.92 times
This level of interest suggests that investors have confidence in the company’s future prospects.
Risks and Considerations
While the IPO presents an opportunity for investment, potential investors should also consider the inherent risks involved:
- Customer Concentration: A significant portion of the company’s revenue comes from its top ten customers. Losing any of these clients could adversely impact profitability.
- Competitive Industry: The IT sector is highly competitive. Failure to innovate or compete effectively could result in reduced market share.
- Dependence on Government Contracts: A large part of the company’s revenue is derived from government contracts, which are often awarded to the lowest bidder. This could pressure profit margins.
- Employee Costs: Rising employee benefit expenses could also affect profitability, as they are a major component of fixed operating costs.
Frequently Asked Questions (FAQs)
What is the Orient Technologies IPO size?
The IPO aims to raise ₹241.76 crore through a combination of fresh issues and an offer for sale.
When will the IPO open and close?
The IPO will open on August 21, 2024, and close on August 23, 2024.
What is the minimum investment required?
Retail investors must invest a minimum of ₹14,832, which corresponds to 72 shares at the upper price band of ₹206.
How can I apply for the IPO?
Investors can apply through their respective brokers or online trading platforms during the subscription period.
When will the shares be listed?
The shares are expected to be listed on August 28, 2024, on both the BSE and NSE.
Who are the lead managers for the IPO?
Elara Capital India Private Limited is the book-running lead manager for the IPO.
Conclusion
The Orient Technologies IPO presents an exciting opportunity for investors looking to enter the IT sector. With a solid financial track record and a growing market presence, the company is well-positioned for future growth. However, potential investors should carefully assess the risks involved and consider their investment strategies before participating in the IPO.
As the listing date approaches, many eyes will be on Orient Technologies to see how the market reacts to this new entrant. With strong subscription numbers and a reputable management team, the future looks promising for both the company and its investors.
