Aditya Infotech IPO opens. Should you apply for the Rs 1,300 crore issue?
Synopsis Aditya Infotech's Rs 1,300 crore IPO opened on July 29, with a price band of ₹640–675 per share, aiming to raise funds for working capital. The company, a leading value-added distributor for security surveillance and enterprise communication systems, has shown strong revenue and PAT growth. However, analysts advise caution due to high valuation and working capital intensity. The Rs 1,300 crore initial public offering (IPO) of Aditya Infotech opened for subscription today, July 29. The company, a technology solutions provider specializing in security surveillance and enterprise communication systems, has set a price band of ₹640–675 per share. The issue is entirely a fresh offer of 1.93 crore shares. It will close on July 31 and be listed on both the BSE and NSE.
ADVERTISEMENT 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.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.
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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.
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(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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