A 24-year-old Bhopal-based integrated IT solutions provider hits the market with a Rs 167 crore issue
Xtranet Technologies Ltd., an integrated information technology solutions provider with over two decades of operating history, opens for subscription on July 23 with the issue closing on July 27. The company delivers end-to-end IT services including enterprise applications, managed services, digital transformation, and proprietary platforms, serving both government and private sector clients.
What the Company Does
Incorporated in 2002 and headquartered in Bhopal, Madhya Pradesh, XTL has steadily expanded its capabilities over two decades — starting with system integration, expanding into application development in 2008, data centre services in 2012, ERP implementation in 2014, and PKI and digital signature services in 2021 through its subsidiary XtraTrust Digisign, followed by business intelligence and analytics through XtraSynergy in 2022.
Its core offerings cover enterprise applications (including its proprietary X-ERP), IT system integration, data centre and command centre management, application development and maintenance, and managed services. Two proprietary platforms differentiate its offering: Synergy, a low-code digital transformation platform for process automation and enterprise-scale digital solutions, and XtraTrust, a licensed certifying authority authorised to issue Digital Signature Certificates and provide PKI-based solutions including e-sign and authentication services.
The company is a CMMI SVC/5 certified organisation and holds multiple ISO certifications including ISO 27001 for information security, ISO 20000 for IT service management, and ISO 22301 for business continuity. A majority of revenues are currently derived from government and PSU projects. As of April 30, 2026, it had 504 employees and 370 contract staff, and an order book of Rs 356.96 crore.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | July 23, 2026 |
| Issue Closes | July 27, 2026 |
| Price Band | Rs 120 – Rs 127 per share |
| Face Value | Rs 10 |
| Issue Size | ~Rs 166.80 crore (at upper cap) |
| Total Shares | 1,31,34,000 shares |
| Minimum Lot | 110 shares |
| Post-Issue Market Cap | Rs 664.03 crore (at upper cap) |
| Issue Constitutes | 25.12% of post-IPO equity |
| BRLM | Share India Capital Services Pvt. Ltd. |
| Registrar | KFin Technologies Ltd. |
| Listing | BSE and NSE |
Post-IPO, paid-up equity capital will increase from Rs 39.15 crore to Rs 52.29 crore.
Objects of the Issue
| Object | Amount (Rs crore) |
|---|---|
| Working capital requirements | 102.00 |
| Repayment / prepayment of borrowings | 20.20 |
| Capex on systems, hardware and installation | 8.48 |
| General corporate purposes | Balance |
Working capital is the dominant use of proceeds at Rs 102 crore, which is reflective of the business model — IT services companies with significant government and PSU clients often carry elevated receivables and require substantial working capital funding.
Financial Performance
| Particulars (Rs cr) | FY24 | FY25 | FY26 |
|---|---|---|---|
| Total Income | 233.26 | 276.53 | 366.01 |
| Net Profit | 10.94 | 30.03 | 40.73 |
| PAT Margin | 4.70% | 10.88% | 11.15% |
| RoCE | 30.53% | 39.59% | 32.52% |
Revenue and profit have grown consistently across all three reported periods, with the particularly sharp jump in profitability between FY24 and FY25 — PAT more than doubled — driving the average three-year RoNW to 29.91%.
Margins have broadly held in FY26 at 11.15%. The three-year average EPS stands at Rs 8.36. Two concerns flag up: contingent liabilities of Rs 42.74 crore as of March 31, 2026 and higher-than-normal trade receivables — a common but important risk for IT companies with government clients given typically longer payment cycles.
Valuation and Peer Comparison
At the upper band of Rs 127, the issue is priced at a P/E of 16.30x on FY26 earnings and 22.13x on FY25 earnings, and at a P/BV of 2.19x on post-IPO NAV of Rs 57.92. Independent analysts consider the issue fully priced against recent financial data. The listed peer comparison includes Silver Touch Technologies, Dynacons Systems, and Coforge, currently trading at P/E multiples of 70.2x, 18.2x, and 40.7x respectively — though these are not directly comparable businesses.
Analysts consider the issue fully priced based on recent financial data, noting it operates in a highly competitive and fragmented segment.
In the grey market, Xtranet Technologies is currently commanding a GMP of around Rs 7 per share, indicating a modest estimated listing premium of roughly 5–6% over the upper price band of Rs 127 — a figure that has softened from a high of Rs 26 in the days before the issue opened, suggesting measured rather than aggressive investor enthusiasm in the unofficial market
Risks to Consider
A majority of revenues come from government and PSU projects, which typically means longer payment cycles, higher trade receivables, and vulnerability to changes in public sector IT spending priorities or project delays. The Rs 102 crore working capital allocation is substantial relative to the issue size and reflects this structural dynamic. The IT services industry is highly competitive and fragmented, with constant pressure on pricing, margins, and talent retention. Contingent liabilities of Rs 42.74 crore add a note of caution. The company has not paid any dividends since incorporation. At a market cap of Rs 664 crore, post-listing liquidity may also be limited.