The initial public offering (IPO) of Esconet Technologies Limited Day 3 concluded with an astounding response, as the subscription status reached a remarkable 471.18 times its initial offering. This phenomenal level of oversubscription underscores the immense investor confidence in Esconet Technologies’ market prospects and business model. The massive demand from both retail and institutional investors highlights the company’s strong position in its sector and the high expectations for its future growth and performance.
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Esconet Technologies Limited IPO – Fundamental Analysis:
Esconet Technologies Limited’s pre-IPO financial analysis reveals robust revenue growth, with a notable increase from ₹9,659.26 lakhs to ₹7,141.59 lakhs within six months, alongside a significant rise in equity from ₹588.61 lakhs to ₹902.97 lakhs, reflecting investor confidence.
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Despite a slight decrease in profit after tax from ₹318.42 lakhs to ₹305.47 lakhs, indicating stable profitability, the return on net worth (RoNW) decreased from 54.83% to 33.83%. However, diluted EPS showed a minor increase from ₹39.63 to ₹39.73, showcasing steady earnings per share amidst the company’s expansion.
Esconet Technologies Limited IPO – Risks And Challenges:
Esconet Technologies Limited’s IPO faces multiple risks, including heavy dependence on its top five customers for 41% of revenue and vulnerability to potential loss of government project contracts. Additionally, exposure to rapid technological changes in the IT sector poses a significant challenge.
Furthermore, reliance on third-party suppliers for raw materials adds another layer of risk, as any disruption in the supply chain could impact the company’s operations. These factors collectively highlight the challenges Esconet Technologies may encounter in maintaining its revenue streams and operational stability post-IPO.
