Praruh Techno BSE SME IPO review

•    The company is engaged in providing technology solutions as an ICT System integration firm.
•    It posted growth in its top and bottom lines for the reported periods.
•    The company is operating in a highly competitive and fragmented segment.
•    Lead Manager has a poor track record for its past mandates.
•    Based on its recent financial data, the issue appears fully priced.
•    Well-informed/cash surplus/risk savvy investors may park moderate fund for medium term in this “High Risk/Low Return” bet.

PREFACE: Praruh Techno IPO is opening on 24.09.25, but till time i.e., 10 am of 22.09.25, RHP was not uploaded at BSE Website – Designated Exchange, though RHP is dated 16.09.25. This kind of deliberation going unattended raises eyebrows and regulatory norms from the Exchange. Should this be allowed?

ABOUT COMPANY:
Praruh Technologies Ltd. (PTL) is an ICT system integration firm dedicated to transforming businesses and driving growth through comprehensive technology solutions. The company specializes in a broad spectrum of services, including Hardware, Applications, Data Centre, Networking, Storage, Security, Audio-Video Integration and Collaboration Solutions. By offering turnkey solutions and leveraging best practices in ICT systems and infrastructure, it addresses the diverse needs of various industries and organizations, ensuring that each solution is both effective and aligned with the client's business strategy.

Praruh means 'to grow.' The company was founded with the goal of assisting businesses in growing by addressing their unique IT and data needs through end-to-end system Integration solutions and exceptional service experience. The company provides turnkey solutions and best practices in ICT systems and infrastructure to a wide range of industries and organizations.

What sets PTL apart is its consulting-led approach, which combines deep technical expertise with a focus on exceptional service delivery. The company's extensive investment in developing technical capabilities, support infrastructure, and engineering services allows it to manage complex IT projects with precision. This commitment is particularly evident in its data center consolidation projects and similar initiatives, where its expertise proves invaluable. Service quality is a cornerstone of its philosophy. 

The company boasts a highly certified and trained team of consulting sales and services professionals who provide 24/7 support, ensuring that any IT challenge is met with prompt and effective solutions. This dedication to service excellence has earned Praruh a strong reputation across both the private and public sectors, where its turnkey solutions have consistently delivered maximum value and satisfaction.

In an era defined by data-driven innovation, Praruh remains at the forefront by integrating advanced technologies such as machine learning and artificial intelligence into its offerings. This forward-thinking approach, combined with robust hardware configurations, seamless networking, and secure storage solutions, equips businesses with a reliable foundation to build upon and adapt to the evolving technological landscape. As of August 31, 2025, it had 61 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3730000 equity shares to mobilize Rs. 23.50 cr. at the upper cap. It has announced a price band of Rs. 60 – Rs. 63 per share of Rs. 10 each.  The IPO opens for subscription on September 24, 2025, and will close on September 26, 2025. The minimum application to be made is for 4000 shares and in multiple of 2000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.78% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 11.00 cr. for working capital, Rs. 1.00 cr. for unidentified acquisition in India, Rs. 6.33 cr. for repayment of certain borrowings, and the rest for general corporate purpose.

The IPO is solely lead managed by Corporate Makers Capital Ltd., while Maashitla Securities Pvt. Ltd. is the registrar to the issue. SMP Securities Ltd. is the market maker. SMP Securities Ltd. is a syndicate member. The IPO is underwritten to the tune of 15.01% by Corporate Makers and 84.99% by SMP Securities Ltd.

The company has issued initial equity shares at par, and issued further equity shares (as Rights Issues) at undisclosed price between November 2021, and January 2023. It has also issued bonus shares in the ratio of 50 for 1 in July 2024. The average cost of acquisition of shares by the promoters is Rs. 0.18, and Rs. 0.20 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 10.20 cr. will stand enhanced to Rs. 13.93 cr.  Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 87.86 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit, of Rs. 28.04 cr. / Rs. 2.18 cr. (FY23), Rs. 61.66 cr. / Rs. 6.50 cr. (FY24), Rs. 62.62 cr. / Rs. 6.79 cr. (FY25). Its top and bottom lines remained almost static for the last two fiscals. 

For the last three fiscals, the company has reported an average EPS of Rs. 6.02, and an average RoNW of 59.66%. The issue is priced at a P/BV of 3.55 based on its NAV of Rs. 17.76 as of March 31, 2025, and at a P/BV of 2.11 based on its post-IPO NAV of Rs. 29.88 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 12.94, and based on its FY24 earnings, the P/E stands at 13.52. Thus, the issue appears fully priced.

The company has posted PAT margins of 7.78% (FY23), 10.58% (FY24), 10.96% (FY25), and RoCE Margins of 80.84%, 89.41%, 53.62%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has adopted a dividend policy in July 2024. based on its financial performances and future prospects. But it has given a table for dividend paid by it on page no. 169 of the offer document, that has no data of dividend payments. This amounts to an eyewash only.   

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Esconet Techno, and E2E Networks, as its listed peers. They are currently trading at a P/E of 40.0 and 186.0 (as of September 22, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 5th mandate from Corporate Makers in the last two fiscals. Out of last 4 listings, 3opened at discount and 1 at par, thus, it has poor track record.