Matrix Geo NSE SME IPO review (Not Rated)

•    The company is primarily engaged in providing comprehensive geospatial and consulting services with a strong focus of DaaS.
•    It has also started Drone Training institute and is now a DGCA authorised RPTO.
•    The company posted steady growth in its top and bottom lines for the reported periods.
•    Based on its recent financial data, the IPO appears aggressively priced.
•    Well-informed investors may park funds for long term.

ABOUT COMPANY:
Matrix Geo Solutions Ltd. (MGSL) is primarily engaged in providing comprehensive geospatial and consulting services with a strong focus on Drone-as-a-Service (DaaS) and Geospatial & Remote Sensing Services. Through Drone as a service, it offers high-resolution drone-based aerial surveys for various applications, including mapping, surveillance, and infrastructure inspection. Its services include the creation of detailed orthophotos, 3D models, digital elevation models, and precise topographical maps. Additionally, the company offers geo-referenced video solutions for progress monitoring, surveillance, and incident management across various industries.

In addition to drone services, MGSL offers extensive consultancy in geospatial data analysis, where it utilizes remote sensing technologies like LiDAR, satellite imagery, and drone surveys to provide clients with actionable insights for their projects. It assists clients in Railways, Roadways, Water, Irrigation, Renewable Energy, Agriculture, Mining, Urban & Rural Planning projects and provide comprehensive reports to guide business decisions. These reports offer both advisory and end-to-end solutions to meet clients' needs. Further, its web-based platform offers customers real-time access to their project data, simplifying monitoring and decision-making processes.

MGSL also creates detailed maps and perform geospatial analyses to address specific location-based business challenges. Its team processes and interprets data, followed by image interpretation and classification, to accurately identify and categorize land features. By leveraging data-driven insights, it empowers clients to make smarter decisions, optimizing both cost and time efficiency. Its services are designed to deliver efficient solutions that support planning, monitoring, and management across various sectors.

Over the years, the company has successfully delivered services to diverse sectors, including Railways, Roadways, Ropeways, Irrigation, Agriculture, Hydropower, Metro projects, Mining, Urban Planning, Solar Power and Surveillance. The company has provided services under several projects, such as the Indian Railways’ High-Speed Rail Corridor, Bharatmala Road Project, Hemkund Sahib Ropeway Project, Statue of Unity Area Development, topographical survey over Chenab River, various Solar projects, and Kumbh Mela planning, among others.

Additionally, the company is empanelled with several organizations that requires frequent modern survey technology services. To streamline the process and avoid repeated tendering, these organizations establish empanelment’s, selecting competent companies for long-term collaborations. This allows work to be allocated at pre-agreed rates over extended periods, typically ranging from 2 to 5 years. Further, the company has recently expanded its services to include "Drone Training and Education" and is now a DGCA-authorized Remote Pilot Training Organisation (RPTO), offering certified training programs. In accordance with the Drone Rules 2021 released by the Ministry of Civil Aviation, individuals must possess a valid Remote Pilot Certificate from a DGCA-authorized RPTO to legally operate drones in the country.

“Drone Academy of India” is its brand under which the company offers capacity-building programs aimed at creating skilled, employable resources. Through practical, industry-focused drone technology training, it fosters experience and raise awareness among engineers, technicians, and other stakeholders. As of July 31, 2025, it had 100 employees on its payroll and 1 contract worker.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of 3865200 equity shares worth Rs. 40.20 cr. at the upper cap. The company has announced a price band of Rs. 98 – Rs. 104 per share of Rs. 10 each. The IPO opens for subscription on September 23, 2025, and will close on September 25, 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 NSE SME Emerge. The issue constitutes 26.51% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 6.47 cr. for purchase of new drones, Rs. 8.03 cr. for purchase of survey equipment and technology, Rs. 2.72 cr. for capex, Rs. 15.50 cr. for working capital, and the rest for general corporate purposes.

The IPO is solely lead managed by Narnolia Financial Services Ltd., while Maashitla Securities Pvt. Ltd., is the registrar to the issue. Prabhat Financial Services Ltd., is the market maker. Nexgen Financial Solutions Pvt. Ltd. is a syndicate member. The IPO is underwritten to the tune of 15.01% by Narnolia Financial, and 84.99% by Prabhat Financial

After issuing initial equity shares at par value, the company issued further equity shares at a fixed price of Rs. 79.92 per share in October 2024, and has also issued bonus shares in the ratio of 1000 for 1 in September 2024. The average cost of acquisition of shares by the promoters is Rs. 0.01, and Rs. 28.64 per share.

Post-IPO, company’s current paid-up equity capital of Rs. 10.72 cr. will stand enhanced to Rs. 14.58 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 151.65 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total Income/Net Profit of Rs. 6.75 cr. / Rs. 1.09 cr. (FY23), Rs. 13.77 cr. / Rs. 3.35 cr. (FY24), and Rs. 22.19 cr. / Rs. 5.86 cr. (FY25). Boosted top and bottom lines in a pre-IPO year raise concern as it appears to be a window dressing to pave the way for fancy valuations.

For the last three fiscals, the company has reported an average EPS of Rs. 4.12, and an average RoNW of 31.55%. The issue is priced at a P/BV of 5.09 based on its NAV of Rs. 20.44 as of March 31, 2025, and at a P/BV of 2.44 based on its post-IPO NAV of Rs. 42.59 per share (at the upper cap).

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 25.87, and based on its FY24 earnings, the P/E stands at 45.22. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 16.40% (FY23), 24.47% (FY24), 26.52% (FY25), and RoCE Margins of 15.79%, 35.53%, 33.69%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for any financial year so far. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown Genesys Intl., Corp. as its listed peer. It is currently trading at a P/E of around 40.3 (as of September 19, 2025).  However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORDS:
This is the 17th mandate from Narnolia Financial in the last three fiscals (including the ongoing one). Out of the last 10 listings, 1 opened at discount, and the rest with premium ranging from 2.60% to 90.00% on the date of listing.