What You Must Know About Orient Technologies IPO: Price ₹206 per share

About Orient Technologies

Mumbai-based Orient Technologies Limited is a rapidly expanding IT solutions provider founded in July 1997. Its areas of expertise include cloud and data management services, IT infrastructure, and IT-enabled services (IteS).

The firm's clientele consists of the following: Mazagon Dock Shipbuilders Limited (Mazagon Dock), Joint Commissioner of Sales Tax (GST Mahavikas), Mumbai; Tradebulls Securities Private Limited (Tradebulls); Vasai Janata Sahakari Bank Limited (VJS Bank) and Vasai Vikas Sahakari Bank Limited (VKS Bank); Integreon Managed Solutions India Private Limited (Integreon); and D'Décor Exports Private Limited (D'Décor).

The company is certified to operate an information security management system per ISO/IEC 27001:2013, ISO 9001:2015 for quality management, ISO 20000-1:2018 for information technology services management, and ISO 27001:2013 for information security management systems. In addition, we have received the CMMI Maturity Level 3 Certificate and the ISO 22301:2012 certificate for our business continuity management systems.

Its headquarters are in Mumbai, Maharashtra, and its sales and service offices are spread throughout India's cities, including Ahmedabad, Gujarat, New Delhi, Bengaluru, Karnataka, Chennai, Tamil Nadu, and Navi Mumbai and Pune in Maharashtra. As of June 30, 2024, the company employed 1,482 people permanently.

The Objective of the Issue

• Acquisition of Navi Mumbai Property: Orient Technologies aims to acquire office premises at Navi Mumbai, encompassing units 1201 to 1204 at Plutonium Business Park, Turbhe MIDC, District Thane. This strategic acquisition will strengthen the company's operational base, enabling expanded services and enhanced accessibility in the heart of Navi Mumbai's industrial hub.
• Funding Capital Expenditure for NOC and SOC Setup: Orient Technologies plans to invest in state-of-the-art equipment to establish a Network Operating Centre (NOC) and Security Operation Centre (SOC) at its Navi Mumbai property. This initiative will enhance its network management and cybersecurity capabilities, ensuring robust and secure operations for its clients.
• Purchase of Equipment for Device-as-a-Service (DaaS) Offering: The company will allocate funds to procure equipment and devices to support its Device-as-a-Service (DaaS) offering. This investment will allow Orient Technologies to provide scalable, on-demand device solutions that cater to the evolving needs of businesses with flexible, technology-driven services.

Highlights of Orient Technologies IPO

Orient Technologies IPO is set to launch with a fixed price issue of ₹214.76 crores. The issue comprises a fresh issue of 0.58 shares with an offer-for-sale of 0.46 crore shares. Here are the key details of the IPO:

• The IPO opens for subscription on August 21, 2024, and closes on August 23, 2024.
• The allotment is expected to be finalised on Monday, August 26, 2024.
• Refunds will be initiated on Tuesday, August 27, 2024.
• Credit shares to Demat accounts are also expected on Tuesday, August 27, 2024.
• The company will tentatively list on BSE, NSE Mainboard on  Wednesday, August 28, 2024.
• The price band is set at ₹195 to ₹ 206 per share.
• The lowest lot size for the IPO application is 72 shares.
• Retail investors need to invest a minimum of ₹14,832.
• The minimum investment for High-Net-Worth Individuals (HNIs) is 14 lots (1,008 shares), amounting to ₹207,648, and bNII is 68 lots amounting to ₹1,008,576.
• Elara Capital (India) Private Limited is the book-running lead manager for the IPO.
• Link Intime India Private Ltd serves as the registrar.
   

Orient Technologies IPO- Key Dates

The overall timeline for the Orient Technologies IPO is as follows:

Orient Technologies Limited Issue Details/Capital History

Orient Technologies' initial public offering (IPO) is a main-board offering of 10,425,243 equity shares with a face value of ₹10, totalling ₹214.76 crores. The price range for the issuance is ₹195 to ₹206 per share. The minimum order quantity is 72 shares. The IPO starts on August 21, 2024, and ends on August 23, 2024. The IPO's registrar is Link Intime India Private Ltd.

Orient Technologies IPO Allocation & Minimum Investment Lot Size

The IPO shares of the company are distributed as follows:

The least number of shares that investors can bid on is 72, and they can bid more than that also. Below is a table that shows the lowest and maximum shares and the number of investments made by HNIs and retail investors.

SWOT Analysis: Orient Technologies IPO

Strengths

• Established Market Presence: Orient Technologies has a strong foothold in the technology sector and a solid reputation that has been built over the years.
• Diverse Service Offerings: The company offers various services, including network management, cybersecurity, and Device-as-a-Service (DaaS), catering to various business needs.
• Strategic Location: The acquisition of the Navi Mumbai property places the company in a prime industrial area, enhancing operational efficiency and client accessibility.
• Experienced Leadership: The management team comprises industry veterans with extensive experience in technology and business operations.

Weaknesses

• High Capital Expenditure: Significant funds are required to acquire property and equipment, which may strain financial resources.
• Dependence on Key Clients: A large portion of revenue may come from a few key clients, making the company vulnerable to client loss or reduced contracts.
• Technological Dependency: Rapid technological changes require constant upgrades and investments, which could be challenging to manage effectively.
• Limited Global Reach: The company's operations are largely focused on the Indian market, limiting its exposure to international opportunities

Opportunities

• Growing Demand for Cybersecurity: With increasing cyber threats, the demand for robust cybersecurity solutions is rising, presenting growth opportunities for the company’s SOC services.
• Expansion of DaaS Market: The device-as-a-service market is expanding as businesses seek flexible, scalable solutions for their IT needs, which provides a significant growth avenue.
• Government Initiatives: Supportive government policies for digital transformation and industrial growth in India offer opportunities for business expansion.
• Strategic Acquisitions: Future acquisitions in related technology sectors could enhance service offerings and market reach.

Threats

• Intense Competition: The technology sector is highly competitive, with numerous players offering similar services, which could impact market share.
• Economic Downturns: Global or national economic slowdowns could reduce business spending on technology, affecting revenue.
• Regulatory Changes: New regulations in the technology sector could increase compliance costs or limit certain operations.
• Cybersecurity Risks: As a technology company, Orient Technologies is vulnerable to cybersecurity breaches that could harm its reputation and financial stability

Financial Highlights: Orient Technologies IPO

Over the past four fiscal years, Orient Technologies Limited has exhibited consistent financial growth. The company’s assets have steadily increased, rising from ₹112.45 crores in FY21 to ₹311.14 crores in FY24, reflecting ongoing investments and expansion efforts. This asset growth signifies the company's strong focus on enhancing its infrastructure and operational capabilities.

Revenue for Orient Technologies has shown a positive upward trend, growing from ₹248.96 crores in FY21 to ₹606.86 crores in FY24. This consistent increase in revenue highlights the company's ability to scale its operations and capture a larger market share year after year. The company’s Profit After Tax (PAT) also mirrors this growth, rising from a modest ₹0.13 crores in FY21 to ₹41.45 crores in FY24, indicating a substantial improvement in profitability and financial performance.

Orient Technologies' net worth has strengthened significantly during this period, climbing from ₹61.29 crores in FY21 to ₹175.31 crores in FY24. This growth in net worth is complemented by a steady increase in reserves and surplus, which grew from ₹44.79 crores in FY21 to ₹138.79 crores in FY24. The rising reserves suggest the company successfully retains earnings to support future growth and stability.