Orient Technologies offers exposure to opportunities in II enabled services market

economictimes.indiatimes.com:

Issue price: Rs 195-206

Issue size: Upto Rs 215 crore

Implied market cap: Upto Rs 858 crore

Face value: Rs 10

Retail portion: 35%

Lot size: 72 shares

Orient Technologies, which provides IT infrastructure, cloud management and related services, plans to raise Rs 120 crore through fresh equity to fund capital expenditure and to buy office premises. It will also raise upto Rs 95 crore through an offer for sale by the promoter group. Their stake will reduce to 73% after the IPO from 97%.

Apart from the core systems integration business, the company has expanded its deliverables into other related areas including IT facility management, network operations centre (NOC), cybersecurity, and data management. These additional offerings provide Orient with an edge over peers in a highly competitive market. It has paid dividends in each of the three years to FY24. On the flip side, its operating margin and return on equity (RoE) have fallen over the past three years. Given these factors, long-term investors with a higher risk appetite may consider the IPO.

Business

Incorporated in 1997, Mumbai headquartered Orient Technologies operates in three business verticals: IT infrastructure products (contributed 52% to FY24 revenue), IT enabled services (22%), and cloud and data management (26%). The company has presence across seven cities in India and a branch office in Singapore to facilitate dollar billing for some of the clients. It had an order book worth Rs 101 crore at the end of June 2024 of which nearly one third