Aditya Infotech IPO opens for subscription. Should you apply?

Synopsis

The Initial Public Offering of Aditya Infotech opened on July 29. The IPO aims to raise Rs 1,300 crore. The company fixed the price band at Rs 640–675 per share. The IPO will remain open until July 31. The company is a technology solutions provider. It specializes in security surveillance and enterprise communication systems.

The Rs 1,300 crore initial public offering (IPO) of Aditya Infotech Ltd. opened for subscription today, July 29, and will remain open until July 31. The company, a technology solutions provider specializing in security surveillance and enterprise communication systems, has fixed a price band of Rs 640–675 per share. The issue is entirely a fresh offer of 1.93 crore shares and will be listed on both BSE and NSE.

Aditya Infotech IPO GMP

The grey market premium (GMP) for the IPO was hovering around Rs 40–45 at the time of opening, indicating mild listing gains. However, the final response will hinge on institutional investor demand and broader market conditions.

Business Overview and Financials

Aditya Infotech is a leading value-added distributor (VAD) in India for electronic security equipment. The company partners with global brands like Dahua, Seagate, TP-Link, Panasonic, and others, distributing across 650+ cities with over 15,000 channel partners.

Its portfolio includes video surveillance products, access control systems, and networking solutions—catering to government, corporates, and SMEs.

Between FY22 and FY24, the company’s revenue grew at a CAGR of 24%, from Rs 2,090 crore to Rs 3,212 crore. PAT grew from Rs 102 crore in FY22 to Rs 210 crore in FY24.

EBITDA margins improved slightly from 9.6% to 10.7% over the same period. However, analysts note that the business remains working capital intensive and exposed to global supply chain risks.

Valuation and Recommendation

At the upper price band of Rs 675, Aditya Infotech is valued at a P/E of 36.2x on FY24 earnings, which is at a premium to industry peers like Redington and Ingram Micro. The IPO aims to raise funds primarily for working capital needs (Rs 600 crore), with the rest for general corporate purposes.

Brokerage firm Bajaj Broking has rated the IPO as “Subscribe with Caution”. While acknowledging the company’s strong brand partnerships, consistent growth, and deep distribution network, the note flags its high valuation and moderate return ratios (RoE 22%, RoCE 20%) as concerns.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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