Orient Technologies Shifts Focus to IT Infrastructure Amid Upcoming IPO
In a significant strategic move, Orient Technologies Limited is set to pivot its focus more intensely toward the IT infrastructure and products sector.
This shift comes at a crucial juncture as the company prepares for its Initial Public Offering (IPO), marking a new chapter in its growth journey.
According to Ajay Baliram Sawant, the Chairman and Managing Director (CMD) of Orient Technologies,
the IT infrastructure and products division has been a substantial revenue generator for the company,
contributing over 50% of the total revenue in FY24. With the IPO on the horizon, the company is positioning itself to capitalize on this lucrative segment.
Orient Technologies IPO: Key Details
IPO Launch Date and Pricing
The much-anticipated Orient Technologies Ltd. IPO is scheduled to open for subscription on Wednesday,
August 21, 2024. The company aims to raise a total of Rs 214.76 crore through this offering.
The public offer includes a fresh issue of 58 lakh shares,
amounting to Rs 120 crore, and an offer-for-sale (OFS) of 46 lakh shares, aggregating to Rs 94.76 crore.
The price band for the IPO has been set between Rs 195 and Rs 206 per share, offering investors an opportunity to participate in the company’s growth story.
Subscription Details
Investors can subscribe to the IPO between August 21 and August 23, 2024.
The minimum lot size is 72 shares, which means that retail investors will need to invest a minimum of Rs 14,832.
This IPO is expect to draw significant attention, given the company’s strong foothold in the IT sector and its promising future prospects.
Objectives of the IPO
The funds raised from the IPO will be utilize for several key objectives.
A significant portion, Rs 120 crore, will be allocate to the purchase of office space at Plutonium Business Park, located in Navi Mumbai.
This will provide the company with a strategic base to manage its operations more efficiently.
Additionally, the funds will support capital expenditures,
including the setup of a Network Operating Center (NOC) and a Security Operation Center (SOC) at the new Navi Mumbai location.
Further investments will made in acquiring equipment and devices to bolster the company’s Device-as-a-Service (DaaS) offerings.
About Orient Technologies
Established in 1997 and headquartered in Mumbai, Orient Technologies Limited has grown to become a significant player in the IT solutions space.
The company has amassed considerable expertise in providing a range of services, including IT infrastructure, cloud solutions, IT-enabled services (ITeS), and data management services.
Over the years, Orient Technologies has built a robust portfolio,
catering to various business verticals, and has positioned itself as a trusted partner for businesses looking to leverage technology for growth.
Key Risks to Consider
Investing in Orient Technologies comes with its own set of risks.
The company is heavily reliant on its top 10 customers, which makes it vulnerable to any potential loss or reduction in business from these clients.
A significant downturn in purchases by these key customers could materially affect the company’s financial health. Additionally, the company depends on specific customer industries for the majority of its revenue.
A loss of customers in these industries could negatively impact the company’s overall performance and financial condition.
Financial Performance
Orient Technologies has demonstrated steady financial growth.
For the fiscal year ending March 31, 2024, the company reported an 8% increase in profit after tax (PAT) and a 12% rise in sales compared to the previous fiscal year.
This upward trajectory in financial performance underscores the company’s strong market position and its ability to navigate the competitive landscape effectively.
Promoters and Management Team
The driving force behind Orient Technologies includes its promoters: Ajay Baliram Sawant, Jayesh Manharlal Shah, Umesh Navnitlal Shah, and Ujwal Arvind Mhatre.
Their combined expertise and vision have been instrumental in steering the company toward sustained growth and innovation.
The leadership team’s strategic foresight is evident in the company’s continue expansion and its readiness to embrace new market opportunities.
IPO Management and Listing
Elara Capital (India) Private Limited has been appoint as the book-running lead manager for the IPO, while Link Intime India Private Ltd. will serve as the registrar.
The allotment of shares is expect to be finale by Monday, August 26, 2024, with the tentative list date set for Wednesday, August 28, 2024. The shares will be list on both the BSE and NSE,
providing liquidity and trade opportunities for investors.
Industry Peers and Competitive Landscape
Orient Technologies operates in a competitive environment, with several notable peers in the IT sector. Key competitors include Dynacons Systems & Solutions, LTIMindtree Limited,
HCL Technologies Ltd, Wipro Ltd, Allied Digital Services, Dev Information Technology Limited, and Tech Mahindra.
These companies have a price-to-earnings (P/E) ratio ranging from 16.46 times to 37.51 times FY23 earnings, as per the RHP. Orient Technologies’ earnings per share (EPS) stood at Rs 10.94,
reflecting its solid financial foundation and growth potential.
Grey Market Premium (GMP) Insights
As of now, the Grey Market Premium (GMP) for Orient Technologies IPO is at 0, indicating that no premium is currently being assigned to the company’s shares in the grey market.
This could suggest a cautious approach by investors or reflect the competitive landscape in which the company operates.
However, the actual performance post-listing will be the true test of investor sentiment.
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Conclusion: A Strategic Bet on IT Infrastructure
Orient Technologies Limited is at a pivotal point in its journey,
with a clear focus on expanding its IT infrastructure and products segment.
The upcoming IPO presents a unique opportunity for investors to participate in the company’s growth story.
While there are risks associated with customer concentration,
the company’s strong financial performance, strategic leadership, and well-define growth objectives make it a compelling investment proposition.
As the company prepares to enter the public markets,
its ability to execute its vision and maintain its competitive edge will be closely watch investors and industry observers alike.
