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5 November 2023

Newjaisa Technologies IPO - Refurbishing Success in Electronics

Introduction:

The Newjaisa Technologies IPO, a book-built issue with a value of Rs 39.93 crores, marks an exciting development in the world of refurbished electronics. This IPO consists entirely of a fresh issue of 84.96 lakh shares. The bidding phase for this offering commenced on September 25, 2023, and concluded on September 27, 2023. Allotment results for the Newjaisa Technologies IPO were confirmed on October 4, 2023, with the shares being listed on NSE SME on October 5, 2023. Priced within a range of ₹44 to ₹47 per share, the minimum lot size for an application was set at 3000 shares, requiring a minimum investment of ₹141,000 for retail investors.

Key Players:

The Newjaisa Technologies IPO enlisted the expertise of Indorient Financial Services Ltd as the book running lead manager and Bigshare Services Pvt Ltd as the registrar for the issue. The market maker for this IPO was Nikunj Stock Brokers.

Stock Performance:

As of October 19, 2023, Newjaisa Technologies Limited's stock was trading at ₹99.75, reflecting a 4.72% increase. The stock opened at ₹94.00 and displayed a daily range of ₹102.70 to ₹89.25, with a previous closing price of ₹95.25. The day's total traded value reached 3,21,000 shares.

Ownership Structure:

Before the issue, the company's shareholding pattern stood at 23,687,472 shares. Post-issue, it adjusted to 32,183,472 shares.

Financial Snapshot:

Newjaisa Technologies Limited demonstrated robust financial performance. As of March 31, 2023, the company's assets amounted to ₹2,208.70 lakhs. The company reported impressive revenue figures, with total earnings of ₹4,453.23 lakhs in fiscal 2023. The company's profit after tax reached ₹675.57 lakhs. The net worth of the company was reported at ₹930.12 lakhs, with reserves and surplus amounting to ₹894.12 lakhs. Total borrowings stood at ₹743.70 lakhs.

Key Metrics:

The IPO presented a Price-to-Earnings (P/E) ratio of 15.51, a Market Capitalization of ₹151.26 crores, Return on Equity (ROE) of 72.63%, Return on Capital Employed (ROCE) of 72.63%, Earnings per Share (EPS) of ₹3.03, and Return on Net Worth (RoNW) of 72.63%.

IPO's Purpose:

The net proceeds from the issue were allocated for the following objectives:

1. Expansion of the refurbishment facility and purchase of plant, machinery, and equipment.
2. Investment in technology development, branding and marketing, and funding working capital requirements.
3. Repayment of bank facilities and general corporate purposes.

Expert Opinion:

Newjaisa Technologies Limited specializes in refurbishing old IT hardware and related devices, gaining momentum as the demand for such products rises in the post-pandemic world. The potential ban on imports of desktops/laptops by the Indian government bodes well for this company. The FY23 results indicate promising prospects ahead. Informed investors might consider allocating funds for medium to long-term rewards.

Subscription Status:

The Newjaisa Technologies IPO witnessed strong interest from investors, achieving an overall subscription rate of 6.85 times as of September 27, 2023. Retail investors displayed significant enthusiasm, with a subscription rate of 6.54 times.

Conclusion:

The Newjaisa Technologies IPO offers an opportunity for investors to participate in a company at the forefront of the refurbished electronics market. As with any investment, it is essential to conduct thorough research and exercise prudent risk management.

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