Orient Technologies IPO Kicks Off: Subscription Status, GMP, and Key Details—Should You Apply?

The Orient Technologies IPO began its public subscription today, Wednesday, August 21, and will continue until Friday, August 23. This Mumbai-based IT solutions provider has already raised ₹64.43 crore from anchor investors ahead of its IPO. The price range for the shares has been set between ₹195 and ₹206 each, with a face value of ₹10.

The IPO is structured with 50% of the shares reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 35% for retail investors.

Key Dates:

• Share Allotment Finalisation: Monday, August 26.
• Refunds Processing: Tuesday, August 27.
• Shares Credited to Demat Accounts: Tuesday, August 27.
• Listing on BSE and NSE: Monday, January 29.

Orient Technologies, established in 1997, specialises in IT solutions, including IT infrastructure, IT-enabled services (IteS), cloud services, and data management. The company’s financial performance has been solid, with consistent growth in revenue, EBITDA, and profit after tax (PAT) over recent years.

In terms of valuation, the price-to-earnings (P/E) ratio based on the diluted earnings per share (EPS) for 2024 is 17.46 times at the higher end of the price band, which is lower compared to the industry average P/E ratio of 29.87 times. Some of its listed peers include companies like HCL Technologies, Wipro, and Tech Mahindra, with P/E ratios ranging from 23.39 to 55.17.

Market Review and Recommendations:

According to Prathamesh P Masdekar, a research analyst at StoxBox, Orient Technologies has shown consistent growth and has a strong presence in the Indian market. Although the company serves several multinational clients, its focus remains primarily on India, with limited international expansion.

Masdekar suggests that the company’s future growth will likely be driven by expanding its product offerings, increasing its global footprint, and strengthening its customer relationships. Given its valuation and growth potential, Masdekar recommends subscribing to the IPO.

IPO Details:

• Total IPO Value: ₹214.76 crore.
• Fresh Issue: ₹120 crore.
• Offer-for-Sale (OFS): 46 lakh equity shares by the promoters.
• Usage of Funds: The funds will be used for general corporate purposes, capital expenditure, and the purchase of an office building in Navi Mumbai.

Grey Market Premium (GMP):

The GMP for the Orient Technologies IPO is currently ₹30, meaning shares are trading at a ₹30 premium in the grey market. Based on this premium, the estimated listing price of the shares could be around ₹236, which is 14.56% higher than the IPO price of ₹206. This trend indicates a strong listing for the shares when they are officially traded.