Cloud computing firm E2E Networks Ltd, backed by early-stage venture capital firm Blume Ventures, made a spectacular debut on the National Stock Exchange’s junior platform on Tuesday with its shares gaining almost 57% from the issue price.
Shares of Delhi-based E2E Networks began trading on the NSE’s Emerge platform for small and medium enterprises at Rs 85 apiece, up 49.2% from the fixed public offering price of Rs 57 each. The stock closed at a high of Rs 89.25.
E2E Networks now has a market capitalisation of Rs 127.14 crore. It had sought Rs 81.19 crore in valuation through the IPO.
The NSE’s benchmark SME index, the Nifty SME, closed 0.5% down at 1746.80 on Tuesday.
E2E Networks’ stellar listing is the best for 2018 on the NSE Emerge, beating Mahickra Chemicals Ltd’s 47% gain on the debut day. Gujarat-based Mahickra, which makes reactive dyes, listed on the stock exchange on 26 April.
The positive start to E2E Networks, founded by Tarun Dua and wife Srishti Baweja, follows an initial public offering (IPO) that received an overwhelming response last week. The IPO was subscribed a little over 70 times the shares on offer.
Update: E2E’s shares hit 5% lower circuit on each of the three sessions through Friday, indicating the stock only had sellers who want to book profit after the bumper listing on Tuesday. The company's shares on the NSE Emerge platform closed at Rs 76.35 each on Friday.
The IPO comprised a fresh issue of 2.75 million shares worth Rs 15.67 crore and an offer for sale of 1.10 million shares.
Tech-focussed early-stage investment firm Blume Ventures sold about 743,000 shares, or nearly one-third of its stake, through the IPO. Blume is estimated to have earned high returns from its partial exit, VCCircle previously reported.
The public issue could be a game changer for VC firms eyeing exits.
E2E Networks provides cloud infrastructure, which includes servers, storage, networking, virtualisation and other open-source software pieces.
The cloud services market continues to rapidly grow in India, as cloud spending is seen as reaching almost $2 billion by the end of 2020, the firm’s IPO filing noted.
E2E reported a 37.5% jump in revenue from operations to Rs 29.3 crore for the year ended March 2017, up from Rs 21.4 crore the year before. The increase was mainly owing to expansion of its business operations.
*This article has been updated to add share movement in the days immediately after listing.