Orient Technologies IPO Listing: Stock list at 40% premium over IPO price

Orient Technologies IPO Listing

Orient Technologies IPO Listing: A Promising Start with Significant Gains

IPO Overview

Orient Technologies, a prominent player in the IT services sector, successfully launched its Initial Public Offering (IPO) with an impressive ₹214.76 crore issue, which was open for subscription from August 21 to August 23, 2024.

Today marked a significant milestone as Orient Technologies made its debut on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), garnering considerable attention and enthusiasm from investors.

Listing Performance

The IPO was priced at ₹206 per share, and the market response was overwhelmingly positive. Upon listing, Orient Tech shares opened at ₹290.00 on the BSE and ₹288.00 on the NSE, reflecting a notable listing gain of over 40%. This initial surge indicates strong investor confidence and robust demand for the company’s shares.

As the trading session progressed, Orient Tech’s stock continued its upward trajectory, hitting the upper circuit limit of ₹304.45 on the BSE.

It closed at this upper circuit limit, showcasing a substantial gain of 47.79% from the IPO issue price. This impressive performance underscores the market’s positive reception of Orient Technologies and its future prospects.

Investor Response

The IPO attracted a phenomenal response from the investment community, underscoring the high level of interest in Orient Technologies.

The overall subscription for the IPO was a staggering 154.84 times the total number of shares available. This overwhelming demand highlights the confidence investors have in the company’s growth potential and its strategic direction.

Breaking down the subscription figures:

• Qualified Institutional Buyers (QIBs): The portion reserved for QIBs was subscribed 188.79 times. This segment includes institutional investors such as mutual funds, insurance companies, and pension funds, which are typically considered to have a long-term investment horizon and a thorough due diligence process.
• Non-Institutional Investors (NIIs): The NII portion saw a remarkable subscription rate of 310.03 times. Non-institutional investors include high-net-worth individuals and corporate bodies, reflecting a high level of confidence and enthusiasm from larger, often more sophisticated, investors.
• Retail Investors: The portion reserved for retail investors was filled 68.93 times. Retail investors are individual investors who typically have smaller investment amounts compared to institutional and non-institutional investors.

The IPO comprised new shares worth ₹120 crore, aimed at raising capital for future growth initiatives. Additionally, 46 lakh shares were sold through the Offer for Sale (OFS) window, providing an exit opportunity for existing shareholders.

Utilization of Funds

The funds raised through the IPO will be strategically allocated to various growth and operational initiatives:

• Office Acquisition: A portion of the funds will be used to acquire office space in Navi Mumbai. This expansion is intended to support the company’s growth and accommodate its expanding workforce.
• Infrastructure Development: Investments will be made in setting up Network Operating Centers (NOCs) and Securities Operation Centers (SOCs) in the newly acquired offices. These centers are crucial for enhancing operational efficiency and ensuring robust data and network management.
• Device-as-a-Service (DaaS): The company plans to invest in equipment and devices to bolster its Device-as-a-Service offerings. This service model aligns with current IT trends and demands, providing clients with scalable and flexible technology solutions.
• General Corporate Purposes: Remaining funds will be utilized for general corporate purposes, ensuring operational flexibility and supporting various strategic initiatives.

Company Profile

Orient Technologies, established in 1997, is a leading provider of IT solutions with a comprehensive portfolio that includes IT infrastructure, IT-enabled services (IteS), cloud computing, and data management services.

Over the years, the company has built a strong reputation and a diverse client base, including several blue-chip organizations and government bodies.

Key clients of Orient Technologies include:

• Blue Chip Corporate Investment Center: A leading investment entity.
• Tradebulls Securities: A prominent securities brokerage firm.
• Vasai Janata Sahakari Bank: A cooperative bank serving the Vasai region.
• Coal India: The largest coal producer in the world.
• Mazgaon Dock Shipbuilders: An important shipbuilding company.
• Joint Commissioner of Sales Tax, Mumbai: A key governmental body in Mumbai.

Financial Performance

Orient Technologies has demonstrated impressive financial performance over the years. The company’s net profit trajectory has shown substantial growth:

• FY 2021: The company recorded a net profit of ₹13 lakh.
• FY 2022: Net profit surged to ₹33.49 crore.
• FY 2023: The profit increased further to ₹38.3 crore.
• FY 2024: The company achieved a net profit of ₹41.45 crore.

During this period, Orient Technologies experienced a compounded annual growth rate (CAGR) of over 34% in revenue, reaching ₹606.86 crore.

This robust financial growth highlights the company’s effective business strategies, operational efficiency, and strong market position.

Final Remarks

The successful listing of Orient Technologies’ IPO marks a significant achievement for the company and reflects strong investor confidence.

The substantial listing gains and the overwhelming subscription levels are indicative of the market’s positive outlook on Orient Technologies.

With strategic plans for utilizing the raised funds, the company is well-positioned to drive future growth and strengthen its presence in the IT services sector.

The positive debut and ongoing investor enthusiasm suggest a promising future for Orient Technologies, aligning with its growth trajectory and long-term objectives.