Review By on April 13, 2017
InfoBeans Technologies Ltd (ITL) is engaged in software development services, specializing in business application development for web and mobile and operate at Capability Maturity Model Integration (CMMI) level 3. ITL’s services can be broadly categorized as storage & Virtualization, Media & Publishing and eCommerce. In India it operates out of 2 facilities in Indore and Pune employing more than 600 people across locations. As the company has prominence in exports, it has established local presence in the North American market by way of a 100% subsidiary, which has 2 offices located in California & Georgia, USA. ITL is ServiceNow partner for implementing their software.
To part finance its acquisition and strategic initiatives, technical development, investment in subsidiaries, sales promotion pans and generate corpus funds, the company is coming out with a maiden IPO of 6342000 equity issue of Rs.10 each at a fixed price of Rs. 58 per share to mobilize Rs. 36.78 crore. Issue opens for subscription on 18.04.17 and will close on 21.04.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Sarthi Capital Advisors Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. This Issuer has been graded by CRISIL SME Rating as ‘SME 1’, indicating highest level of creditworthiness, adjudged in relation to other SMEs and it has been graded by Credit Analysis and Research Limited (“CARE”) as ‘SME Fundamental Grade 4’ [SME Fundamental Grade Four] indicating very good fundamentals. Except for private placement in March 2015, it issued all equity at par and has also issued bonus shares in the ratio of 14 for 1 in March 2013, 1 for 1 in March 2014 and 5 for 2 in March 2017. Post issue its current paid up equity capital of Rs. 17.67 crore will stand enhanced to Rs. 24.02 crore.
On performance front, the company has (on consolidated basis) posted revenue/net profits of Rs. 38.14 cr. / Rs. 7.02 cr. (FY14), Rs. 43.03 cr. / Rs. 5.55 cr. (FY15) and Rs. 74.40 cr. / Rs. 13.20 cr. (FY16). It suffered a setback in FY 15 in bottom-line. For the first nine months of the current fiscal, it has earned net profit of Rs. 7.84 cr. on revenue of Rs. 62.72 cr. If we annualize latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 13 plus and at a P/BV of around 2 plus. Its listed peers are trading at an average P/E of 15 and thus issue appears to have been fully priced.
On merchant banker’s front, this is the 25th mandate from its stable and if we consider last 15 issues, they have given positive returns on the day of listings.
Conclusion: Cash surplus Investors may consider investment for long term as issue appears to have been fully priced.
Review By on April 13, 2017
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of InfoBeans Technologies Ltd. offers an early investment opportunity in InfoBeans Technologies Ltd.. A stock market investor can buy InfoBeans Technologies IPO shares by applying in IPO before InfoBeans Technologies Ltd. shares get listed at the stock exchanges. An investor could invest in InfoBeans Technologies IPO for short term listing gain or a long term.
Read the InfoBeans Technologies IPO recommendations by the leading analyst and leading stock brokers.
InfoBeans Technologies IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the InfoBeans Technologies IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is InfoBeans Technologies IPO?"
Our recommendation for InfoBeans Technologies IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the InfoBeans Technologies IPO.
The InfoBeans Technologies IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit InfoBeans Technologies IPO allotment status to check.
