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Newgen IPO Races Ahead To 70% Subscription On Day 2

Newgen IPO Races Ahead To 70% Subscription On Day 2

Newgen Is Offering 13.4 Mn Shares At An Issue Price of $3.77-$3.85 To Raise $71 Mn

After a slow start on day 1, the IPO of the software company has raced ahead to reach almost 70% mark on day 2, as per the data available on BSE. The Newgen IPO will get closed on January 18, 2018.

After the opening bell on January 16, 2018, Newgen IPO registered 18% subscription on day one. With this public offering, the IT company is attempting to raise $71 Mn by offering 13.4 Mn shares at an Issue price of $3.77 – $3.85 (INR 240-INR 245) per share.

As stated by Newgen Software MD Diwakar Nigam in a media statement earlier, “We are financially doing very well and registering good growth year-on-year. The IPO is mainly to provide exit or monetisation opportunity to some of our existing investors who have been with us for very long time. Around $14.8 Mn – $15.6 Mn (INR 95 Cr-INR 100 Cr) of the total fund will be used for setting up a new office in Noida.”

The remaining amount will be used for ‘General Corporate’ purposes.

The company also raised $20 Mn via anchor share allotment to nine institutional investors, a day prior to the opening of its IPO. With this IPO, Newgen venture capital investors including IDG Ventures, SAP Ventures, and Ascent Capital will also take an exit.

The company will get listed on both NSE and BSE.

Founded in 1992, Newgen Software is an IT company headquartered in New Delhi. It is a software products company offering a platform that enables organisations to rapidly develop powerful applications addressing their strategic business needs.

The firm currently sells its products across 60 countries. It basically provides services to the clients in sectors such as Banking, government/PSUs,  BPO/IT, insurance and healthcare verticals.

While the $71 Mn Newgen IPO appeared under-subscribed on day one, it seems to get over-subscribed by a significant amount on day three. Although the analysts are not expecting much of a listing gain and are rooting more for a long-term investment, with Newgen being an IT company, how well the IPO will do in the Stock market will be worth watching.

Author

Meha Agarwal

Inc42 Staff

Meha has engineering and MBA degrees, but she has always been a writer at heart. It was the perfect combination of utilising her research and analytical skills and her enthusiasm for writing that sparked her interest in writing about the Indian startup ecosystem – the latest tech and gadgets and the startups that create them. She is always on the lookout for industry-specific stories in niche areas of interest such as ecommerce, fintech, greentech and more.

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