Fundamentals Lead Rally
Vijay Kedia, a well-known market expert, has emphasized that stock prices ultimately reflect a company's underlying fundamentals. He pointed to the successful
listing of Exato Technologies as a prime example. The company's IPO, which debuted on the BSE SME platform, saw an approximate 90% increase over its initial price. This followed robust demand during the book-built IPO, which ended on December 2nd, setting a new benchmark for subscription levels within the SME segment. Following the listing, the shares have been consistently rising, trading at Rs 356 compared to the issue price of Rs 140. Kedia's comments arrived at a time when investors have become more discerning, particularly within the SME IPO domain.
Oversubscription Success
Kedia highlighted Exato Technologies' impressive debut, noting that strong fundamentals fueled its near-100% premium listing and an exceptional 947× IPO subscription. Investor interest was widespread and aggressive across all categories. The IPO was oversubscribed 947.21 times overall, driven by non-institutional and retail investors. The non-institutional investor segment spearheaded this surge, with bids exceeding 1,488.72 times the shares available. Retail investors also participated heavily, subscribing to their portion 1,068.74 times. Institutional investors were not far behind, with the qualified institutional buyer segment witnessing subscriptions of 327.08 times, highlighting confidence in Exato's business model and long-term potential. This level of demand is rare even in favorable primary market conditions.
Tech Company's Growth
Exato Technologies has demonstrated robust financial performance. The company recorded an 84% increase in profit after tax, reaching Rs 9.75 crore in FY25, coupled with consistent revenue growth. Its profitability metrics remain strong, with a return on equity of 28.13% and a return on capital employed of 26.38%. This signals strong growth for the technology services firm. Exato operates in the technology transformation sector, providing AI-driven customer experience solutions, analytics, automation, unified communications, and cloud services. The company caters to various industries, including banking, financial services, healthcare, retail, telecom, manufacturing, and IT services.
IPO Funds Allocation
The IPO proceeds will support Exato Technologies' future expansion plans. The company intends to allocate approximately Rs 15.73 crore towards working capital requirements. Another Rs 6.80 crore will be directed towards product development, while Rs 2.53 crore will be used for partial debt repayment, with the remaining funds earmarked for general corporate purposes. The company has developed a team of over 60 engineers and has extended its presence beyond India, with active engagements in the US and Singapore. Its client portfolio encompasses notable names such as MakeMyTrip, RBL Bank, WNS, and IGT Solutions, giving it a blend of domestic and international business exposure.
