Review By on September 27, 2017
IRIS Business Services Ltd. (IRIS) is a provider of software products for compliance, data and analytics globally. It has created a name in the global RegTech Industry with its wide range of products. Its client includes Regulators including Central Banks, Business Registries, Capital Market Regulators and Stock Exchanges. It also provides solutions to the regulated including Corporate, Banks, Mutual Funds. It has recently launched a filing platform IRISGST to help business comply with the GST regime. It is in the process of developing DCP ( a data repository solution). IRIS is active in the global XBRL community.
To part finance its debt repayment, product development, sales and marketing plans and general corpus fund needs, IRIS is coming out with a maiden IPO of 5004000 equity share of Rs. 10 each at a fixed price of Rs.32 per share to mobilize Rs. 16.01 crore. Issue opens for subscription on 29.09.17 and will close on 04.10.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 26.51% of the post issue paid up capital of the company. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Having issued initial equity since incorporation till September 2007 at par, it raised further equity in the price range of Rs. 30.30 to Rs. 85.41 per share between March 2010 and June 2011. It has also issued bonus shares in the ratio of 5 for 1 in March 2010 and 1 for1 in September 2017. Post issue its current paid up equity capital of Rs. 13.88 crore will stand enhanced to Rs. 18.88 crore.
Cost of acquisition of shares by promotes is shown as Rs. 0.13 per share for one director and for others it has shown NA remark.
On performance front, IRIS has (on a consolidated basis) posted revenue/net profits of Rs. 68.46 cr. / Rs. 8.90 cr. (FY14), Rs. 56.33 cr. / Rs. 2.95 cr. (FY15), Rs. 32.91 cr. / Rs. – (7.54) cr. (FY16) and Rs. 27.54 cr. / Rs. – (9.64) cr. (FY17). Thus for last four fiscals its top line is declining and past two fiscal it has incurred heavy losses. For last three fiscals it has posted an average negative EPS of Rs. 4.93 and average negative RoNW of -32.80% on an equity capital of Rs. 6.94 crore. Issue is priced at a P/BV of 2.32. Looking at empty coffins and poor performance with negative earnings, issue is highly priced as it has negative P/E. As per prospectus details, it has no listed peers to compare with.
On merchant banker’s front, this is the 53rd mandate from its stable. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.
Conclusion: Highly priced issue with negative earnings may be given a miss.
Review By on September 27, 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 IRIS Business Services Ltd. offers an early investment opportunity in IRIS Business Services Ltd.. A stock market investor can buy IRIS Business Services IPO shares by applying in IPO before IRIS Business Services Ltd. shares get listed at the stock exchanges. An investor could invest in IRIS Business Services IPO for short term listing gain or a long term.
Read the IRIS Business Services IPO recommendations by the leading analyst and leading stock brokers.
IRIS Business Services IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the IRIS Business Services IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is IRIS Business Services IPO?"
Our recommendation for IRIS Business Services IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the IRIS Business Services IPO.
The IRIS Business Services IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit IRIS Business Services IPO allotment status to check.
