Nelsoft Ltd Files IPO to Raise ₹1,000 Cr for Expansion & Tech Growth

Pune-headquartered Nelsoft Ltd has taken a significant step toward expansion by filing a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). This move is set to help the company raise substantial capital to fuel its growth initiatives and strengthen its market position.

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IPO Details and Fund Allocation

The IPO consists of a fresh issue of shares worth ₹1,000 crore and an offer for sale (OFS) of up to 8 million shares by existing promoters and shareholders. This dual structure enables the company to raise funds for its operational and strategic objectives while providing liquidity to existing stakeholders.

The proceeds from the IPO are intended to serve several key purposes. A portion of the funds will be directed toward capital expenditure, including civil construction and interior enhancements at its Viman Nagar office in Pune. Additionally, the company plans to invest in new workstations and infrastructure at its Hinjewadi office, reflecting a focus on expanding its operational capacity.

Investments in technology are a cornerstone of Nelsoft's strategy. The funds will be used to procure cutting-edge IT equipment, including computer graphics workstations, servers, cloud computing systems, scanners, network switches, and high-performance printers. These upgrades aim to improve operational efficiency and keep the company at the forefront of technological innovation. Furthermore, part of the capital will be allocated for acquiring software subscriptions and licenses, which are critical for sustaining the company's competitive edge in the engineering and design sectors.

Strategic Partnerships for IPO Management

Equirus Capital and IIFL Capital have been appointed as the lead managers for the IPO. Their expertise in handling public issues is expected to ensure a smooth process, from regulatory compliance to maximizing investor participation.

Company Overview and Industry Position

Nelsoft Ltd, a leading provider of technology-driven engineering services and solutions (ER&D), boasts over 20 years of experience. The company serves clients across diverse sectors, including Architecture, Engineering, and Construction (AEC), Manufacturing, and Industrial Plants.

Nelsoft's offerings focus on digital transformation, emphasizing digitalization, digitization, and automation to drive efficiency and sustainability in the design-build-operate lifecycle. These solutions enable clients to optimize resource utilization, reduce costs, and improve project timelines, aligning with industry trends toward greener and more sustainable practices.

Financial Performance

Nelsoft's financial growth reflects its robust operational strategies. For the fiscal year 2023-24 (FY24), the company reported revenue of ₹325.85 crore, a notable increase from ₹291 crore in FY23. The net profit also saw a significant rise, reaching ₹57.85 crore in FY24 compared to ₹46.64 crore in the previous year. This consistent upward trajectory underscores the company's ability to adapt and thrive in a competitive landscape.

Growth Prospects and Market Outlook

Nelsoft’s decision to go public comes at a time when the demand for engineering and design solutions is rising globally. The company is well-positioned to capitalize on this trend, leveraging its expertise and innovative approach to meet client needs. Its emphasis on sustainability and automation aligns with global priorities, making it an attractive proposition for investors.

In addition to strengthening its technological capabilities, Nelsoft plans to explore new markets and deepen its penetration in existing ones. The IPO will provide the financial muscle required to achieve these goals, paving the way for long-term growth.

With its strong financials, a clear roadmap for capital utilization, and a proven track record in the ER&D space, Nelsoft Ltd is set to make a significant impact in the public market. Investors and industry stakeholders will closely watch this IPO, which marks a pivotal moment in the company’s journey toward becoming a leader in engineering and technology solutions.