Netweb Technologies IPO: RHP flags documentary evidence of 2 promoters ‘not traceable’; check all key risk factors

‘’The degree certificates pertaining to the educational qualifications of our Promoters who are also the Directors of our Company, Navin Lodha (being the bachelors’ degree in commerce from Shaheed Bhagat Singh College, University of Delhi), and Vivek Lodha (being the bachelors’ degree in commerce from Shaheed Bhagat Singh College, University of Delhi) are not traceable,” said Netweb Tech in its RHP.

It further adds that the promoters have taken the requisite steps to obtain the relevant supporting documentation, including by making a written application to the aforementioned universities/ college, ‘’they have not been able to procure the same,” as per the statement in the RHP.

‘’Accordingly, our Company has placed reliance on affidavits furnished by these Promoters to us and the Book Running Lead Managers, and copies of the correspondences with the relevant university, to disclose the details of their educational qualifications in this Red Herring Prospectus,” said Netweb Tech. The RHP has been filed with the stock exchanges and capital markets regulator Securities and Exchange Board of India (SEBI).

Netweb Technologies IPO: Check all risk factors

Apart from the above risk, the RHP has flagged more risk factors ahead of the public issue which are as follows:

-The company derives a majority portion of its revenues from operations from a select few of its HCS offerings. Loss or decline in the demand of such offerings may result in an adverse effect on our business, revenue from manufacturing operations and financial condition.

-The company does not have any comparable listed peer companies in India and internationally which provide HCS offerings for comparison of performance and, therefore, investors must rely on their own examination of accounting ratios of the company for the purposes of investment in the offer.

-The company will not receive any proceeds from the offer for sale (OFS). The selling shareholders will receive the net proceeds from the OFS.

-The promoters were involved in certain regulatory proceedings initiated by SEBI which have been settled. One of the members of its promoter group is involved in a regulatory proceeding initiated by SEBI.

-There are some factual inaccuracies in some of their corporate records and corporate filings. The company has in the past, paid insufficient stamp duty on share certificates for allotment of equity shares. It has also made delayed filings with the RoC and certain payments challans in relation to the corporate filings made by the company are not traceable.

-The company had low-capacity utilisation in fiscals 2023, 2022 and 2021. The reduction in actual production or inability to consistently achieve higher production could adversely affect its installed capacity utilization, said the RHP.

-The company does not enter into hedging transactions in respect of its foreign currency exposure. Any losses, on account of foreign currency exchange rate fluctuations may adversely affect its business, results of operations and financial condition.

Netweb Technologies IPO: Price band & other details

As per IPO details, in the offer for sale (OFS), Sanjay Lodha will sell up to 28.6 lakh shares, while Navin Lodha, Vivek Lodha and Niraj Lodha will offload up to 14.3 lakh shares each. Ashoka Bajaj Automobiles LLP will sell 13.5 lakh shares in the OFS.

The company has announced the price band for its upcoming public issue at ₹475-500 per share. Netweb Technologies IPO, which will remain open till July 19, consists of a fresh issue of shares worth ₹206 crore and an offer-for-sale of up to 85 lakh shares by its existing promoters and shareholders. At the upper band price, the company expects to raise ₹631 crore through the IPO.

The company is expected to finalise the IPO allotment on July 24 and initiate refunds on July 25, while the shares will be credited to the demat accounts of eligible allottees on July 26. Netweb Technologies shares will list on July 27 on BSE and NSE.

Netweb Technologies proposes to use the proceeds from the fresh issue for funding capital expenditure requirements worth ₹32.3 crore, while a further ₹128.02 crore will be used for funding long-term working capital requirements. Also, ₹22.5 crore will be utilized for repayment of outstanding borrowings.

Netweb Technologies IPO GMP today

Shares of Netweb Technologies Ltd have made strong debut in unlisted stock market ahead of its subscription opening date. Netweb Technologies shares are available at a premium of ₹338 in grey market today, say market observers.

According to them, Netweb Technologies IPO grey market today is ₹338, which means grey market is expecting that Netweb Technologies IPO listing price would be around ₹838 ( ₹500 + ₹338), which is around 67 per cent higher from Netweb Technologies IPO price band of ₹475 to ₹500 per equity share. So, grey market is highly bullish on the upcoming IPO. The mainboard IPO is expected to attract strong response by investors, signals grey market.

Updated: 15 Jul 2023, 06:33 PM IST