Orient Technologies files DRHP with SEBI to raise funds via IPO

Mumbai-based Orient Technologies has filed Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

According to the draft prospectus, the issue has a face value of ₹10 and consists of a fresh issue worth ₹120 crore and an offer for sale of up to 46 lakh equity shares by the Promoter Selling Shareholders.

The offer for sale consists of the sale of equity shares of up to 11.50 lakh by Ajay Baliram Sawant, Umesh Navnitlal Shah, Ujwal Arvind Mhatre, and Jayesh Manharlal Shah by each promoter.

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The IPO is a book-building issue, wherein not more than 50 percent of the offer shall be available for allocation to qualified institutional buyers, not less than 15 percent to non-institutional investors, and not less than 35 percent to retail individual investors.

The proceeds from the fresh issue, to the extent of ₹79.65 crore for funding its capital expenditure requirements; ₹10.35 crore for the acquisition of office premises at Navi Mumbai; and General Corporate Purposes, added the prospectus.

Elara Capital (India) Private Limited is the sole book-running lead manager for the IPO, and Link Intime India Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

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About Orient Technologies

Founded in 1997, Orient Technologies is a fast-growing information technology (IT) solutions provider. The company creates products and solutions for specialized disciplines across IT Infrastructure, IT-enabled services (IteS) and Cloud and Data Management Services. It collaborates with top technology companies like Dell, Fortinet, and Nutanix to offer advanced solutions tailored to meet the specific needs of their customers.

As of December 31, 2023, Orient Technologies boasted a diverse clientele spanning both public and private sectors, including industries like Banking, Financial Services, Insurance (BFSI), Information Technology (IT), IteS, and Healthcare/Pharmaceuticals, among others.

It also has notable clients such as Coal India, Mazagon Dock, D’Décor, Jyothy Labs, ACG, Integreon, Bluechip, Tradebulls, Vasia Janta Bank, Vasai Vikas Bank and Joint Commissioner of Sales Tax (GST Mahavikas), Mumbai.

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As of December 31, 2023, Orient Technologies' order book stood at ₹92.75 crore.

The Company primarily operates in India and has sales and services offices in several cities across India, including Navi Mumbai, Pune, Ahmedabad, New Delhi, Bengaluru, and Chennai. Additionally, it has a branch office in Singapore.

Orient Technologies' Financials

For fiscal 2022–23, the company’s revenue from operations increased to ₹535.10 crore from ₹467.44 crore in fiscal 2021–22, primarily due to increase in revenue from IT and IT infrastructure products and services, Cloud and DMS, and ITES services. Profit after tax increased 14.35 percent from ₹33.49 crore in fiscal 2022 to ₹38.30 crore in fiscal 2023.

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For the six months ended September 30, 2023, revenue from operations stood at ₹266.31 crore, and profit after tax stood at ₹16.39 crore.

Industry Outlook

The DRHP noted that IT-enabled services (ITeS) cover a wide range of services utilizing information technology and the Internet to deliver various solutions. Over the period from CY2019 to CY2022, the IT industry experienced a notable growth of 4.8 percent Compound Annual Growth Rate (CAGR). Projections indicate that the domestic revenue of the industry is poised to reach ₹43,000 -46,000 crore by Fiscal 2027.

This growth trajectory is anticipated to continue with a CAGR of 6-8 percent between Fiscal 2023 and Fiscal 2027, primarily fueled by the Banking, Financial Services, and Insurance (BFSI) sector alongside the government sector, it added.