There is a smashing new debut on the bourses today. Newgen Software got listed on the BSE at Rs.253 v/s the IPO price of Rs.245. A premium of over 3%. On the NSE, it got listed at Rs.256, a premium of 4.5%.

The IPO had got subscribed 8.25 times.

This is a software product company serving banking, Govt agencies, BPO/IT, insurance, healthcare verticals, through its basket of 3 product platforms – enterprise content management, business process management, customer communication management. While 40% revenue comes from India, approximately 27% comes from US and Middle East each, and balance from Asia Pacific. Broadly, 27% of revenue is generated through sale of software product, 28% from implementation service, 22% from annuity based support service and 17% from AMC.

From an investment perspective and not with a look at mere listing gains, in our New Issue Analysis, we had said, “Based on historic financial performance and lack of clarity on future earnings, the valuation is expensive. Better to gauge the performance over the next few quarters before evaluating Newgan as a candidate for investment.” So the real test is sustainability of this premium listing....