India's Xtranet Technologies prices ₹166.8 crore IPO at up to ₹127
Xtranet Technologies will raise ₹166.8 crore through a pure fresh issue next week, testing investor appetite for a fast-growing but government-reliant IT services firm.
Xtranet Technologies will open its initial public offering on July 23, seeking to raise ₹166.8 crore entirely through the issuance of new shares. The Indian IT solutions provider has set a price band of ₹120 to ₹127 per share, with the subscription window closing on July 27. Shares are scheduled to begin trading on the BSE and NSE on July 30.
Founded in 2002, Xtranet provides enterprise applications, digital transformation services and managed IT solutions. The company has posted rapid earnings expansion, with revenue, EBITDA and profit after tax growing at compound annual rates of 25%, 83% and 91% respectively between FY24 and FY26. In FY26 alone, total income rose 32% year-on-year to ₹366.01 crore, while net profit increased 36% to ₹40.73 crore. EBITDA for the year reached ₹63.18 crore, up from ₹47.20 crore in FY25.
At the upper end of the price band, the IPO is priced at 16.6 times FY26 post-issue earnings. Despite this reasonable valuation relative to listed peers, broker SBI Securities has assigned a "Neutral" rating to the offering. The brokerage highlighted structural risks that could undermine the company's growth trajectory. Xtranet relies heavily on government contracts, creating customer concentration. Furthermore, a stretched receivables cycle raises questions about the actual cash conversion and long-term sustainability of its reported profits.
SBI Securities noted it would prefer to monitor the company's cash flow generation and execution consistency after listing before taking a constructive stance. Unregulated grey market activity, however, indicates strong early retail enthusiasm. The IPO is currently commanding a premium of ₹26 over the upper price band, implying an expected listing price of ₹153 and a first-day pop of roughly 20.5%. This premium has held steady between ₹25 and ₹26 over the last five trading sessions.
Because the offering contains no offer-for-sale component, all capital raised will flow directly to the company rather than exiting shareholders. The issue structure allocates 50% of the shares to Qualified Institutional Buyers, 35% to retail individual investors, and 15% to non-institutional investors. Retail investors must bid in multiples of 110 shares, requiring a minimum investment of ₹13,970 at the top of the price band.
