The (IPO) of CSM Technologies was subscribed 0.31 times in the early hours of the second day of bidding on Thursday, driven by participation from non-institutional and retail investors.
As of 10.27 am, the qualified institutional buyers (QIB) portion had not received any bids, while the non-institutional investors (NII) category was subscribed 0.55 times. The retail investor segment was booked 0.51 times and the employee portion was subscribed 0.60 times.
CSM Technologies has raised ₹20 crore from anchor investors ahead of the public issue.
The company is seeking to raise ₹145.78 crore through the IPO and has fixed a price band of ₹107-113 per share. The issue will close for subscription on June 29. The company’s shares are proposed to be listed on the BSE and NSE next week.
According to the company, proceeds from the fresh issue will be used to fund working capital requirements, repay debt and pursue inorganic growth opportunities.
Brokerages divided on valuation and growth outlook
SBI Securities has assigned a neutral rating to the issue. The brokerage said CSM Technologies operates in the GovTech segment, providing digital transformation and e-governance platforms to government and regulated sectors. It noted that the company delivered a CAGR of 11.4 per cent in revenue, 2.5 per cent in EBITDA and a decline of 5.6 per cent in PAT during FY23-FY25.
At the upper price band of ₹113, SBI Securities said the IPO is valued at a 9MFY26 annualised price-to-earnings multiple of 30.7 times on a post-issue basis, which appears relatively attractive compared with peers. The brokerage highlighted the company’s stronger margin profile, niche positioning and favourable industry tailwinds from increasing government spending on digital infrastructure.
However, SBI Securities flagged risks, including client concentration, dependence on government contracts, working capital intensity and execution challenges. It also noted rising receivable days, which increased to 89 days in FY25 from 58 days in FY23 and 55 days in FY24, and are expected to remain elevated in FY26E and FY27E. The brokerage said it would prefer to track the company’s performance for a few quarters after listing.
Anand Rathi has recommended subscribing to the issue for long-term gains. The brokerage said CSM Technologies, with a strong market position in its industry, is valued at about 41.6 times FY25 earnings at the upper end of the price band and is fairly valued. It added that the company’s consistent track record and superior financial metrics support its long-term investment case.