On Thursday, Netweb Technologies started the first-day trade with a massive 88% premium, mainly on anticipated lines, given the substantial IPO subscription numbers and the prevailing buoyancy in equity markets.

The stock unlocked at Rs 947 on the NSE against the issue price of Rs 500 per share, while the BSE opening price was Rs 942.

The public issue of Netweb Technologies gave an overwhelming response from investors, subscribing 90.36 times during July 17-19. Qualified institutional buyers gave the highest support to the IPO, purchasing 228.91 times the reserved portion. High net worth individuals subscribed 81.81 times the allotted quota, and retail investors 19.15 times, while the portion for employees was subscribed 53.13 times.

The equity market circumstances are also favourable, with the benchmark indices gaining 17% from March lows, backed by foreign inflow, hopeful global cues, and upbeat corporate earnings.

It has raised Rs 631 crore via a public issue encompassing a fresh point of Rs 206 crore and an offer for sale of Rs 425 crore by promoters. The price band was Rs 475-500 per share.

At 11.30 am, shares were trading at Rs 901.65, higher at 80.33% or Rs 401, on the NSE.

Netweb Technologies aims to leverage its presence in the fast-growing HCS (high-end computing solutions) industry for developing refined, customised computing structures to meet the high-end computational requirements of customers.

Hence, Netweb generated high EBITDA margins (15.7% in FY23 against 14%) and ROCE (return on capital employed at 52% in FY23).

The company recorded revenue growth at a CAGR of 77% during FY21-FY23. Profit and EBITDA grew at 139% and 121% CAGR in the same period. PAT margin has progressively augmented from 5.8% in FY21 to 10.5% in FY23.

Netweb Technologies has preserved a healthy average return on equity of 46% during FY21-23.

The Indian IT market is forecasted to be $225 billion in FY23 and is expected to range to $372.7 billion by FY29 with a CAGR of 8.8%. The PLI scheme and ‘China Plus One’ strategy will boost the IT sector, providing growth opportunities.

Moreover, it forayed into developing new product lines, like network switches and 5G ORAN Appliances, in FY23. These are critical to the data centre industry for enterprise IT and the telecommunication industry for allowing 5G services.