IT Solutions Company DelaPlex IPO Oversubscribed Within Hours

DelaPlex Ltd, an American subsidiary IT solutions company, launched its initial public offering (IPO) on January 25 and saw an overwhelming response, getting oversubscribed within hours. 

The DelaPlex IPO, which will close on January 30, has already attracted bids for over 9 lakh shares, more than twice the amount on offer.

The company’s IPO includes two parts: a fresh issue of 18 lakh shares aiming to raise about Rs 34.56 crore, and an offer for sale of 6 lakh shares worth approximately Rs 11.52 crore. The price for each share is set between Rs 186 and Rs 192. Investors can bid for a minimum of 600 shares.

In the grey market, an unofficial trading area, DelaPlex shares are in high demand. They are trading at Rs 125 above the issue price, indicating strong investor interest and expectations of a 65.1% gain when the shares list officially.

DelaPlex, established in 2004 and a subsidiary of U.S.-based delaPlex INC., offers technology and software development solutions. For the fiscal year ending March 2023, the company reported a revenue of Rs 54 crore and a net profit of Rs 7.9 crore. 

The IPO funds will be used for various purposes, including advertising, sales, marketing, working capital, purchasing laptops, and general corporate needs.

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The company has some risks to consider. It relies heavily on a few customers for its revenue, especially its corporate promoter and group company. 

Also, a significant part of its business comes from customers in the United States, so any economic downturn there could impact DelaPlex’s business. 

Additionally, the company depends on third-party cloud services, which could pose operational and financial risks.

The IPO’s book-running lead manager is Shreni Shares Limited, with Bigshare Services Pvt Ltd as the registrar. DelaPlex is expected to list on the NSE SME platform on February 2, 2024. 

The high grey market premium a day before the IPO opened, at Rs 86 over the issue price, suggests a potential listing price of Rs 277, reflecting the market’s optimistic view of the company’s public debut.