Netweb Technologies IPO: GMP, subscription status, other details. Apply or not?

The Delhi based company intends to raise as much as ₹631 crore via the public offer.

The IPO will open on July 17 and close on July 19.

Around 50% of the offer is available to QIBs, 15% to NIIs and 35% to retail investors.

The company intends to use net proceeds to fund capital and operational expenditures, loan payments and general corporate purposes.

Netweb Technologies with both design and manufacturing capabilities in-house, has installed over 300 supercomputing systems and over 4,000 accelerator/GPU based AI systems and enterprise workstations as of May 2023.

The company is an original equipment manufacturer (OEM) which is eligible for the government’s production linked incentives (PLI) scheme.

Between March 31, 2022 and May 31, 2023 it has almost doubled its order book value from ₹48.56 crore to ₹90.21 crore,” the company said in a press release.

The company stated in its DRHP that a significant portion of its orders are from government-related entities, which allocate contracts through a tendering process. Typically, tenders are awarded to the lowest bidder who meets all eligibility criteria.

concern that its performance could be negatively impacted if it fails to secure these contracts or is compelled to lower its bid value.

Furthermore, the company has experienced low capacity utilization in the past three fiscal years. Its success is heavily reliant on maintaining long-term relationships with its customers, particularly its top 10 clients.

Additionally, the company generally does not engage in long-term contracts with its customers. This lack of long-term commitments exposes the company to risks associated with potential customer attrition, as it may struggle to retain established clients.