The initial public offering (IPO) of Xtranet Technologies commenced its subscription period on Thursday, July 23, with the issue set to close on Monday, July 27. The IT solutions provider aims to raise Rs 127 crore through a fresh issue of 1,31,34,000 equity shares.
Investors can apply for shares within a price band of Rs 120 to Rs 127 per equity share, with a minimum application size of 110 shares. Xtranet Technologies, incorporated in 2002 and based in Bhopal, specializes in integrated IT solutions, offering a range of services including enterprise applications, digital transformation, managed services, and proprietary platforms across various industries.
Issue Details and Fund Utilization
The net proceeds from this maiden stake sale are earmarked for several key purposes: repayment of existing debt, capital expenditure for the installation of systems and hardware, meeting working capital requirements, and general corporate purposes. Prior to the IPO, Xtranet Technologies successfully raised Rs 50.04 crore from 10 anchor investors by allocating 39,40,200 shares at Rs 127 apiece. Notable anchor investors included Taurus Midcap MF, Steptrade Revolution Fund, Tiger Strategies Fund, and Venus Investments VCC.
Financial Performance and Allocation
For the financial year ended March 31, 2026, Xtranet Technologies reported a net profit of Rs 40.73 crore on a revenue of Rs 366.01 crore. This marks significant growth from the previous year, FY25, where the company posted a profit of Rs 30.03 crore with a revenue of Rs 276.53 crore. The company's current valuation implies a market capitalization of approximately Rs 665 crore.
The IPO allocation reserves 50 percent of the offer for Qualified Institutional Bidders (QIBs), 15 percent for Non-Institutional Investors (NIIs), and 35 percent for retail investors.
Listing and Brokerage Views
Share India Capital Services is serving as the sole book-running lead manager for the IPO, with Kfin Technologies appointed as the registrar. The shares of Xtranet Technologies are scheduled for listing on both BSE Ltd and NSE on Thursday, July 30.
SBI Securities: Neutral
Highlighting Xtranet's strong execution track record and healthy earnings growth, SBI Securities noted the issue's reasonable valuation at a P/E multiple of 16.6x of FY26 earnings. However, concerns regarding customer concentration, dependence on government contracts, and a stretched receivables cycle led to a 'Neutral' rating, with a preference to monitor cash-flow generation post-listing.
Swastika Investmart: Subscribe
With an order book of Rs 356.96 crore as of April 30 and consistent growth in revenue and profitability, Swastika Investmart views the IPO as fairly valued. They suggest investors with a medium-term investment horizon and adequate risk appetite may consider subscribing with moderate allocation.
Marwadi Financial Services: Subscribe with caution
Marwadi Financial Services assigned a 'subscribe with caution' rating, citing reasonable valuation and an established track record with Government and PSU clients. However, they cautioned about the company's weak cash conversion cycle from a long-term investment perspective.
BP Equities: Subscribe
BP Equities highlighted Xtranet's second-highest revenue growth among peers, highest RoNW, and comparable EBITDA and PAT margins. They believe the current valuation offers an attractive risk-reward proposition and recommend a 'subscribe' rating for a long-term investment horizon.
Ventura Securities: Subscribe
Ventura Securities noted the utilization of IPO proceeds for debt repayment, technology upgrades, capital expenditure, and working capital. They emphasized Xtranet's high-margin digital platforms and significant revenue from long-term government and PSU contracts, leading to a 'subscribe' rating.
Disclaimer: This article provides information for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.