Chatterbox Techno BSE SME IPO review

•    The company is engaged in providing digital and influencer marketing services and social media management services through its two segments i.e., “Chtrbox” and “ChtrSocial”/
•    The company posted growth in its top and bottom lines for the reported periods, but its bottom line remained almost stagnant for the last two fiscals.
•    It is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears fully priced.
•    Well-informed/risk seeker may park moderate funds for medium term.

ABOUT COMPANY:
Chatterbox Technologies Ltd. (CTL) is primarily engaged in providing digital and influencer marketing services, and social media management services through two segments, viz., “Chtrbox” and “ChtrSocial”.

Chtrbox is an influencer and marketing platform and agency in India, connecting brands/ products and social media influencers. Since 2016, the company has managed approximately thousand plus campaigns with approximately 500 Influencers and content creators to reach and engage large number of subscribers of social media platforms such as Instagram. Chtrbox uses the latest technology like HypeAuditor with the strategy to build influencer content and campaigns mainly for marketing and brand building on social media platforms. As of now the company primarily operates in India, with HQ in Mumbai, and it has team members in many cities of India. It has successfully rendered services outside India in international markets like Singapore, UAE, USA and UK helping it build a global footprint. As part of its expansion strategy, it is targeting key international markets such as the UAE and Southeast Asia, where influencer marketing is on the rise.

ChtrSocial is the Social Media Management and Brand Design wing of Chtrbox. With creative talents in strategy, content, design and production ChtrSocial aims at humanizing brands with creative social media content, short form videos production and strategic storytelling. Key markets where ChtrSocial services provided in India includes Mumbai, Delhi, and Bangalore and Internationally, it has previously serviced inbound clients from the USA, however, as on date the company is not providing Chtrsocial services to any of the international clients.

The company aims to be one of the leading forces in connecting brands with authentic influencer voices, shaping meaningful and impactful collaborations between influencers and brands that inspire and engage global audiences. It strives to empower influencers and brands alike, creating campaigns that resonate with values of authenticity, creativity, and trust, while driving measurable success and lasting connections in the digital world. Primarily, t is working on B2B model and expanding its reach. As of March 31, 2025, it had 97 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3727200 equity shares to mobilize Rs. 42.86 cr. at the upper cap. It has announced a price band of Rs. 110 – Rs. 115 per share of Rs. 10 each.  The IPO opens for subscription on September 25, 2025, and will close on September 29, 2025. The minimum application to be made is for 2400 shares and in multiple of 1200 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.35% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 6.33 cr. for working capital, Rs. 11.07 cr. capex on existing business, Rs. 7.14 cr. for capex on additional office cum new studio, Rs. 5.02 cr. for capex on brand building of the company, and the rest for general corporate purpose.

The IPO is solely lead managed by Expert Global Consultants Pvt. Ltd., while Bigshare Services Pvt. Ltd. is the registrar to the issue. Prabhat Financial Services Ltd. is the market maker, as well as a syndicate member. 

The company has issued initial equity shares at par, and issued further equity shares at a fixed price of Rs. 350 per share in March 2016 and October 2016. It has also issued bonus shares in the ratio of 80 for 1 in December 2024. The average cost of acquisition of shares by the promoters is Rs. NIL, and Rs. 24.49 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 10.42 cr. will stand enhanced to Rs. 14.14 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 162.65 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit, of Rs. 40.20 cr. / Rs. 1.28 cr. (FY23), Rs. 55.37 cr. / Rs. 8.53 cr. (FY24), Rs. 59.45 cr. / Rs. 8.86 cr. (FY25). It posted growth in its top and bottom lines, but it marked small rise from FY24 onwards in earnings.

For the last three fiscals, the company has reported an average EPS of Rs. 7.19, and an average RoNW of 36.79%. The issue is priced at a P/BV of 4.67 based on its NAV of Rs. 24.61 as of March 31, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 18.37, and based on its FY24 earnings, the P/E stands at 19.07. Thus, based on its recent consolidated financial data, the issue appears fully priced.

The company has posted PAT margins of 3.18% (FY23), 15.40% (FY24), 14.90% (FY25), but, its RoCE data is missing from the offer document.

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown R K Swamy, Digicontent, Vertoz as its listed peers. They are currently trading at a P/E of 40.1, 9.54, and 24.1 (as of September 24, 2025). However, they are not truly comparable on an apple-to-apple basis. 

MERCHANT BANKER’S TRACK RECORDS:
This is the 19th mandate from Expert Global in the last four fiscals. Out of the last 10 listings, 1 opened at discount, and the rest with premium ranging from 6.31% to 90% on the date of listing.