Market reacts to fundamentals, says Vijay Kedia as his latest pick for an SME IPO doubles the money

Market veteran Vijay Kedia said Friday that stock prices will eventually follow company fundamentals, pointing to the strong listing performance of Exato Technologies, an IPO pick from his portfolio that nearly doubled investor money in its debut.In a post on X, Kedia said that when fundamentals are strong, the market responds decisively. He highlighted that his deep-tech investment has received a record 947 returns and is listed at a premium of almost 100%. He called it a reminder that quality technology stories are still attracting overwhelming demand, despite broader market noise.

Exato Technologies made its debut on the BSE SME platform with a sharp rally, posting a gain of around 90% over its issue price. The strong listing followed robust demand during the book-built IPO, which closed on December 2 and set a new benchmark for subscription levels in the SMB segment.Post-listing, the shares are seeing a one-way rally, currently trading at Rs 356 against an issue price of Rs 140.

Investor interest in the issue was broad and aggressive across all categories. The IPO was subscribed a total of 947.21 times, mainly driven by non-institutional and private investors. The non-institutional investor segment emerged as the biggest driving force, with bids worth 1,488.72 times the number of shares offered. Retail investors also piled in heavily, subscribing their share 1,068.74 times, reflecting strong participation from smaller investors betting on the company’s growth prospects.

Institutional investors were not far behind. The qualified institutional buyer segment saw 327.08x subscriptions, signaling confidence among institutions in Exato’s business model, financial performance and long-term scalability. Such demand across the board is rare, even in a booming phase of the primary market, and underlines the power of the investment story.

Exato Technologies operates in the technology transformation space, offering AI-driven customer experience solutions, analytics, automation, unified communications and cloud-driven services. The company serves a wide range of industries, including banking and financial services, healthcare, retail, telecom, manufacturing and IT services. The solutions are designed to help companies modernize customer engagement, improve operational efficiency and leverage data-driven decision making. The company has built a team of over 60 engineers and expanded its presence beyond India, with active involvement in the US and Singapore. Its client list includes household names such as MakeMyTrip, RBL Bank, WNS and IGT Solutions, giving it a mix of domestic and international business exposure.

Financially, Exato has reported strong growth. The company posted an 84% increase in profit after tax to Rs 9.75 crore in FY25, along with steady revenue growth. Profitability figures remain healthy, with a return on equity of 28.13% and a return on invested capital of 26.38%, levels considered strong for a growing technology services company.

Proceeds from the IPO will be used to support the next phase of growth. The company plans to deploy around Rs 15.73 crore for working capital needs, Rs 6.80 crore for product development, Rs 2.53 crore for partial debt repayment, while the rest will be for general corporate purposes.

Kedia’s comment comes at a time when investors have become increasingly selective, especially in SME IPOs.