Netweb Technologies files DRHP to raise funds via IPO

Delhi-NCR-based server maker Netweb Technologies India has filed its draft red herring prospectus (DRHP) papers with capital markets regulator SEBI to raise funds through an initial public offering (IPO).

According to the draft papers, the issue with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs 257 crore and an offer-for-sale (OFS) of up to 8.5 million equity shares by promoters selling shareholders.

The OFS will include up to 2.86 million shares by Sanjay Lodha, up to 1.43 million shares each by Navin Lodha, Vivek Lodha, and Niraj Lodha, and up to 1.35 million shares by Ashoka Bajaj Automobiles.


The offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation to qualified institutional buyers (QIBs), not less than 15% of the offer shall be available for allocation to non-institutional investors, and not less than 35% of the offer shall be available for allocation to retail individual
investors.

The company, in consultation with the lead bankers to the issue, may consider a pre-IPO placement aggregating up to Rs 51 crore. If such placement is completed, the fresh issue size will be reduced.

As per the DRHP, the company plans to allocate Rs 128.02 crore for its working capital requirements, Rs 22.50 crore for repayment of its outstanding debt, and Rs 32.77 crore for funding its capital expenditure.

Netweb Technologies, incorporated in 1999, is among India’s leading Indian-origin, owned and controlled OEMs in the space of HCS providing Supercomputing systems, private cloud and HCI, data centre servers, AI systems, and enterprise workstations, and HPS solutions, according to an F&S Report mentioned in the DRHP.

Between March 31, 2022, and February 28, 2023, it has more than doubled its order book value from Rs 48.56 crore to Rs 98.12 crore.

For the fiscal year 2022, the company’s revenue from operations increased 73.0% to Rs 247.03 crore against Rs 142.79 crore a year ago, primarily due to an increase in the sale of Supercomputing systems, AI systems, and enterprise workstations and data centre servers. Net profit for the period increased 172.82% to Rs 22.45 crore against Rs 8.23 crore last year.

For the 6 months that ended September 30, 2022, revenue from operations stood at Rs 143.02 crore, and net profit stood at Rs 14.73 crore.

Equirus Capital and IIFL Securities are the book-running lead managers, and Link Intime India is the registrar for the offer. The equity shares are proposed to be listed on the BSE and NSE.

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