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Review By Dilip Davda on March 15, 2017
Octaware Technologies Ltd (OTL) is a Holding Company with consolidated business interests in software development, enterprise solution and consulting firm engaged in the business of providing a range of Information Technology (“IT”) solutions to companies across sectors such as Healthcare, Education, Telecom, Oil & Gas, Real Estate & Construction, Banking & Financial Services and Manufacturing sectors. OTL designs, develops and maintains software systems and solutions, create new applications and enhance the functionality of its customers’ existing software products.
The Octaware Group delivers services across all stages of the product life-cycle, which enables it to work with a wide-range of customers and allows the company to develop, enhance and deploy its customers’ software products. The various services offered by OTL are Software Development Services, Enterprise Portal, ERP and CRM Implementation, Consulting Services, Mobile Solutions, RFID Solutions, Cloud and IT Infrastructure Services and Geospatial Services. It also provide an array of products and solutions like PowerERM – Employee Relationship Management, Hospice – Healthcare Solution and iOnAsset – Asset Tracking & Management System, IntelliTrade – Trading Platform Support, RealWin – Real Estate CRM Solution, Life2Care – Patient Relationship Management, eDocNet – Enterprise Content and Document Management Solution and eQuire – Office Automation and eProcurement Management Solution which help its clients in strategizing their business objectives. For tax benefits, the company has preferred to be the holding company for its 3 subsidiaries and it shifts its business to these arms.
To part finance its investment in subsidiaries and general corpus fund needs, the company is coming out with a maiden IPO of 955200 equity share of Rs. 10 each (comprising fresh equity issue of 445200 shares and offer for sale of 510000 shares) at a fixed price of Rs. 90 per share to mobilize Rs. 8.60 crore. Issue opens for subscription on 17.03.17 and will close on 24.03.17. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd and Cameo Corporate Services Ltd is the registrar to the issue. The company issued initial equity at par till2012. Thereafter it issued further equity in a price range of Rs. 20 to Rs. 100 per share. It has also issued bonus shares in the ratio of 10 for 1 in September 2013 and 1 for 2 in Sept. 2014. Its current paid up equity capital of Rs. 3.15 cr. will stand enhanced to Rs. 3.59 crore post issue.
On performance front, the company has posted turnover/net profits of Rs. 4.10 cr. / Rs. 1.34 cr. (FY14), Rs. 5.52 cr. / Rs. 1.15 cr. (FY15) and Rs. 7.31 cr. / Rs. 1.50 cr. (FY16). For the first half of the current fiscal it has earned net profit of Rs. 1.09 crore on a turnover of Rs. 3.64 crore. If we annualize the latest earnings and attribute it on the fully diluted equity capital post issue, then asking price is at a P/E of around 14 plus (against industry composite of 16 plus) and at P/BV of 3.4 plus. Thus issue appears to be fully priced.
On merchant banker’s front, this is the 16th mandate from its stable and past mandates have shown mixed trends.
Conclusion: As the issue appears to have been fully priced, only cash surplus risk savvy investors may consider it for long term.
Review By Dilip Davda on March 15, 2017
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Octaware Technologies Ltd offers an early investment opportunity in Octaware Technologies Ltd. A stock market investor can buy Octaware Technologies IPO shares by applying in IPO before Octaware Technologies Ltd shares get listed at the stock exchanges. An investor could invest in Octaware Technologies IPO for short term listing gain or a long term.
Read the Octaware Technologies IPO recommendations by the leading analyst and leading stock brokers.
Octaware Technologies IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Octaware Technologies IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Octaware 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 Octaware Technologies IPO.
The Octaware Technologies IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Octaware Technologies IPO allotment status to check.
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