Newgen Software Technologies IPO

Check All IPO Reviews

Newgen Software Technologies IPO

7.5

Company Background

7.5/10

Price Band

7.0/10

Company Financials

7.5/10

IPO Industry Situation

8.0/10

Reliability

7.5/10

Pros

  • Stable Industry
  • Strong Financials
  • Strategic Future Plans

Cons

  • Strong Competition
  • 2016 was not a good year
IPO NameNewgen Software Technologies Limited IPONewgen Software Technologies Limited IPO
Opening Date16th January, 2018
Shares Issue Size13,453,93213,453,932
Face Value₹10
IPO Price Band₹240 - ₹245
Bid Lot61 Shares
Total Bid Amount₹14,640 - ₹14,945
Listing AtNSE, BSE
Retail Allocation35%
Estimated IPO Size₹424.62 Crore
Day#No. of Shares SubscribedShares Subscription
Day 123.16 Lakh0.19 times
Day 238.13 Lakh0.30 times
Day 398.18 Lakh8 times

 

Newgen Software Technologies Day 1 Performance

Data available on the NSE showed the NewGen Software Technologies IPO received bids for 23.16 lakh shares against the issue size of 1.22 crore shares. This converts to 19% of the overall chunk of shares available.

Newgen Software Technologies Day 2 Performance

The Newgen Software Technologies IPO was subscribed 30 percent on the second day of the three-day bidding process on Wednesday. The numbers don’t really look impressive yet.

If you look at the data available on the NSE website, it shows that the IPO received bids for 38.13 lakh shares against the issue size of 1.22 crore shares till Wednesday’s noon.

Newgen Software Technologies Day 3 Performance

The third day went like a blockbuster for the tech IPO and was subscribed 8 times the original number of shares issued. Till 2nd day, the IPO was going towards a disappointing climax but surprisingly on the 3rd day, retail investors came to the rescue and took the subscription,

IPO is closed for bidding now but you can check upcoming IPOs in 2018.

Newgen Software Technologies – Background

Newgen Software Technologies is a rapidly growing software company which is offering a platform to organizations all over the world to develop powerful applications which address their strategic business needs. Newgen Software Technologies was founded in 1992 in New Delhi.

From past 25 years, the company has helped the organizations to gain the competitive advantage by increasing the quality and efficiency through enhanced services and bottom line. The company has excelled in software product development. The company operate in three spaces of technology market

  •    ECM (Enterprise Content Management)
  •    BPM (Business Process Management)
  •    CCM (Customer Communication Management)

All these markets are growing globally at the rate of 7-10% while the rest of the technology space is growing much slower. These areas are even growing at a much faster pace in India and the company gets over 40% of the business from India.

The company has a long-standing relationship with their clients and has 17 Fortune 500 companies on their clients’ list. Newgen is operating in more than 60 countries.

Also Read: How to Apply for an IPO in 2018?


 

Board of Directors – Newgen Software Technologies

Diwakar Nigam, Chairman, and Managing Director

Diwakar Nigam is the alumnus of IIT Delhi and IIT Madras.

He is the founding member of NASSCOM, India’s apex Information Technology industry association. 

Diwakar Nigam has been on the Board of Newgen Software technologies for a while now (since April 1, 1993) and in total, has more than 35 years of experience in the information technology industry.


TS Varadarajan, Director

He has more than 35 years of experience in the field of software designing and development. 

Varadarajan co-founded Newgen Software Technologies Limited in 1992 and served as the CFO (Chief Financial Officer) of the company till October 05, 2017.

He was then appointed as a whole-time Director of Newgen Software Technologies Limited.

Newgen Software Technologies – IPO Data Points

The IPO of New Delhi based Software Company Newgen Software Technologies Limited will be open on 16th January 2018 and close on 18th January 2018. The price band of the Newgen Software Technologies IPO is in the range of ₹240 – ₹245 per equity share.

The lot size is 61 shares so retail investors can apply in the multiple of 61 shares. If you want to buy 61 shares the price will be between ₹14,640 – ₹14,945.

The company is going to raise over ₹400 crore from the initial public offering (IPO). The offer consists offer for sale by the existing shareholders and fresh issue.

Newgen Software Technologies – Offer for Sale

The company is selling 13,453,932 equity shares through offer for sale. It will fetch over ₹322 crore for the company. In offer for sale existing venture capital investors are selling their stake so this fund will not be utilized for the company purpose.

Some of the venture capitalists which are selling the stake are IDG Ventures, SAP Ventures, and Ascent Capital. IDG is selling 4.57% of the stake, SAP Ventures is selling 3.31% while Ascent Capital is selling 11.42% of its stake.

Newgen Software Technologies – Fresh Issue

The Newgen Software Technologies Limited is offering a fresh issue of ₹95 Crore.

Issue Objective

The main purpose of the fresh issue is to raise the funds for

  •    The purchase and furnishing of the new office in Greater Noida, Uttar Pradesh
  •    General Corporate purpose

Newgen Software Technologies – Revenue and other financial details

The table below will give you a quick idea about the financials of Newgen Software Technologies:

 

Also Read: 50+ Upcoming IPOs in 2018

The financial performance of Newgen Software Technologies is quite strong but the company suffered a setback in the financial year 2016 because of higher spending on Research & Development (R&D) for new software.

Here is a quick look at the performance of NewGen Software Technologies when it comes to its assets over the years:

If we leave the financial year 2016 the company is showing steady growth in its profit. In the financial year 2017, the Newgen Software Technologies has shown 88% growth in the profit percentage after the investment on the R&D in the previous year.  

In 2015 the profit of the company was ₹463.8 million which reduced to ₹278.2 million in 2016 because of higher spending on R&D. but this investment in R&D gives benefit to the next year’s performance and the company acquired more clients.

Then, this is how the revenue and corresponding profits of the company have fared in the last few years (in ₹ Millions):

In 2017 the profit of the company reached to ₹523.62 million. The company is showing a compound annual growth rate of 21% from past more than five financial years. The R&D spending of the company has increased by over 50% from past three fiscal years.

The EPS of last fiscal years is ₹8.15 and average RoNW is 15.23%.

Newgen Software Technologies IPO Events

The IPO of Delhi based Software Company Newgen Software Technologies Limited will open on 16 January 2018 and close on 18 January 2018. The price band of the issue is fixed at ₹240 at the lower side and ₹245 at the higher side. Finalization of allotment will be on 23rd January 2018.

If you have applied for the share of the company in IPO and allocated than you will get the shares in your Demat account on 25th January 2018 otherwise your funds will be returned to your account on 24th January 2018.

The company will be listed at the NSE and BSE on 29th January 2018.

EventDate
IPO Open Date 16th January, 2018
IPO Close Date18th January, 2018
Finalization of Basis of Allotment23rd January, 2018
Initiation of Refund24th January, 2018
Credit of Shares to Demat Accounts25th January, 2018
Listing on Exchange29th January, 2018

 

Newgen Software Technologies Contact information

The contact information of Newgen Software Technologies is given below. For more information, you can also visit their website.

Newgen Software Inc.

Washington DC Metro Area
1364 Beverly Road, Suite 300
McLean, VA 22101
Tel : +1-703-749-2856, +1-703-439-0703

For General Inquiry:

generalinfo@newgensoft.com
8270 Woodland Center Boulevard
Tampa.FL – 33614
Tel : +1-813-769-3575
Fax : +1-905-361-6401
usa@newgensoft.com

Our Recommendation* (Buy/Sell/Hold)

Parameters for IPO Valuation

Some of the specific parameters that have been considered in this complete review and recommendation include:

 

Newgen’s IPO is the second initial public offering (IPO) of 2018 after Hyderabad based Apollo Micro Systems Ltd.

According to the senior vice president Virender Jeet the company is planning to grow through various routes such as increasing the geographical footprint and adding more verticals beyond the core five verticals. The company also has plans to going deeper into the existing verticals by providing the new products to the existing clients.

Positives of Newgen Software Technologies

Some of the merits towards this technology company landing an IPO include:

  • Strong financial performance and profitable track record with strong balance sheet and stable cash flow
  • The company has strong industry recognition
  • Diversified business across various verticals and planning to increase the verticals
  • Future plans to expand the business by increasing geographical footprints
  • The company sells their software through subscriptions and licenses which are expected to grow in future by adding more customers through new verticals and new products in existing verticals.
  • Focus on in-house R&D
  • Experienced management with qualified support team

According to our IPO review of the Newgen Software Technologies has strong fundamental and financial records. The focused approached the company makes it a good choice for the investors.

Our recommendation is to buy the shares of the Newgen Software Technologies for long-term though you can get some handsome gains at the time of listing.


* The recommendation is just our viewpoint and you are advised to check with your financial advisory and/or stockbroker before investing any money in this IPO. A Digital Blogger bears no responsibility in such investments and the corresponding profits/losses.

Summary
Date
Broker Name
Newgen Software Technologies IPO
Overall Rating
41star1star1star1stargray

Add a Comment

Your email address will not be published. Required fields are marked *

8 + eleven =