Armee Infotech Submits Preliminary Papers to SEBI for Rs 250 Crore IPO

Armee Infotech Ltd., an IT infrastructure solutions provider has filed preliminary papers with capital markets regulator Securities and Exchange Board of India (SEBI) to raise up to Rs 250 crore through an initial public offering (IPO). The IPO of this Gujarat-based company is exclusively a fresh issue of equity shares, with no offer-for-sale (OFS) component, as detailed in the draft red herring prospectus (DRHP) filed on Friday.
Armee Infotech IPO

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The proceeds from the IPO, after covering expenses, will mainly be used for Rs 160 crore to meet the company’s working capital needs, Rs 10.63 crore for repaying outstanding debts, and the remaining funds will support various corporate needs. Armee Infotech had Rs 79.8 crore in outstanding borrowings at the end of April.

The Patel family holds a significant 92.72% stake in Armee Infotech, with the remaining shares owned by public shareholders. The company, which also offers IT-managed services, has shown strong financial performance. In the nine-month period ending December FY24, Armee Infotech reported a profit of Rs 24.96 crore on revenues of Rs 560.2 crore, surpassing its entire fiscal 2023 performance.

Armee Infotech Financials

The IT industry is a significant driver of India’s economic growth, contributing 7.5% to the GDP in FY 2023, up from 7.4% in FY 2022. In the financial year 2023, the company’s profit skyrocketed by 393% to Rs 16.6 crore, up from Rs 3.4 crore the previous year. Revenue from operations also saw a substantial increase of 301.6%, reaching Rs 502.7 crore. However, in the fiscal year ending March 2022, the company’s profit decreased by 9.7% to Rs 3.4 crore from Rs 3.7 crore in 2021, even though revenue grew by 19.2% to Rs 125.2 crore during the same period.

According to a D&B report, the IT industry added 3.2 lakh new jobs in the financial year 2023 by bringing the total workforce to 5.72 million. The company’s project portfolio includes the supply and installation of IT hardware and software, the establishment of smart classrooms, the installation of digital infrastructure for public distribution systems, and the digitization of primary agriculture credit societies, among other things.

Khandwala Securities and Saffron Capital Advisors are serving as the book-running lead managers for Armee Infotech’s public issue.

At the end, the proceeds from the IPO will be used by Armee Infotech to consolidate their financial position, increase their operational capacity and sustain growth in the competitive sphere of IT infrastructure.

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