Excelsoft Technologies shares fall 7% after listing at 12.5% premium to IPO price

The shares of Excelsoft Technologies made a decent stock market debut on November 26, listing at Rs 135 apiece on BSE. This marks a premium of 12.5 percent over the IPO price of Rs 120 apiece.

The company's market capitalisation during debut stood at Rs 1,554 crore.

The stock then pared some gains, falling 7 percent to close at Rs 125.95 per share at the end of its debut day. The stock is currently around 5 percent higher than its IPO price. Its market capitalisation at the end of the debut day stood at around Rs 1,450 crore.

Listing premium vs grey market estimates:

The listing premium has significantly beaten grey market estimates. Ahead of listing, the unlisted shares of the company were trading with a little over 3 percent grey market premium (GMP) over the IPO price, according to data on Investorgain.

Excelsoft Technologies IPO:

The Rs 500-crore initial public offering of Excelsoft Technologies saw strong investor interest during its three days of public bidding, being subscribed more than 43 times its offer size between November 19 and November 21. Non Institutional Investors (NII) showed the most interest in the maiden public issue of the company, booking their reserved portion nearly 102 times.

Excelsoft Technologies had moved to the primary market to raise Rs 500 crore through a fresh issue of shares worth Rs 180 crore and an offer-for sale (OFS) of shares worth Rs 320 crore by promoter Pedanta Technologies. The price band for the IPO was set at Rs 114-120 per share. Investors could bid for a minimum of 125 shares, requiring an investment of Rs 15,000 at the upper price band, and in multiples thereafter.

Excelsoft Tech IPO Anchor Book:

A day before the IPO opened for public bidding, the Karnataka-based company announced that it has raised Rs 150 crore from 10 anchor investors on November 18. It finalised allocation of 1.25 lakh shares to anchor investors at the upper price band. "Out of this total allocation to anchor investors, 8.33 lakh shares (6.67 percent of total anchor book) were allocated to Bandhan Mutual Fund which has applied through its two schemes," it said.

Bengal Finance & Investment, which is associated with ace investor Ashish Kacholia, was the largest anchor investor during the round, picking up 50 lakh shares for Rs 60 crore, while 360 ONE Equity Opportunity Fund bought 20.83 lakh shares for nearly Rs 25 crore.

Societe Generale, GKFF Ventures, Sanshi Fund, BNP Paribas Financial Markets, Alphamine Absolute Return Fund, Shine Star Build-Cap, and Rajasthan Global Securities were other investors who participated in the anchor book.

How will the issue proceeds be used?

Excelsoft Technologies aims to use Rs 61.8 crore of the fresh issue proceeds to buy land and construct new building at its Mysore property, and Rs 39.5 crore for upgradation including external electrical systems of existing facility at Mysore.

Further, Rs 54.6 crore will be used for upgradation of IT infrastructure (software, hardware and communications & network services), and the remainder funds for general corporate purposes.

Here's what analysts say:

Excelsoft's IPO represents a compelling bet on vertical SaaS in the education and assessment segment, said Siddharth Maurya, Founder & Managing Director from Vibhavangal Anukulakara. “With over 70 active global clients and an enviable track record in AI-enabled assessment tools, the company is riding the rapid growth wave in the digital learning economy,” he said.

“A mix of ₹180 crore in fresh capital and ₹320 crore in OFS does speak to the confidence of existing backers, but its future success will be contingent on sustained margin growth and disciplined reinvestment in infrastructure,” he added.

Shravan Shetty, Managing Director at Primus Partners noted that the company has a large dependence on the North American market, with more than 50% of revenue coming from this region, which could be a risk factor going forward.

Abhinav Tiwari, Research Analyst at Bonanza, also advised some caution. "Excelsoft’s revenue structure shows extremely high concentration risk, which raises concerns about stability and long term sustainability. In FY 2025, the top 5 customers contributed 66% of the company’s revenue, the top 10 contributed 77%, and the top 20 accounted for nearly 89%. The biggest vulnerability is that Pearson Education Group alone makes up almost 59% of total revenue. Since most customer contracts are short term and non-exclusive, any reduction in orders or termination by Pearson could severely disrupt the company’s operations and financial performance," he said.

"Overall, Excelsoft's high dependence on a single customer, limited diversification, and lack of strong competitive advantages make the IPO more attractive for promoters exiting than for long term investors seeking reliable value creation," he added.

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