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InfoBeans Techno NSE SME IPO review (May apply)

Review By Dilip Davda on Apr 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.


Conclusion / Investment Strategy

Cash surplus Investors may consider investment for long term as issue appears to have been fully priced.

Review By Dilip Davda on Apr 13, 2017

Review Author

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. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. 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 own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

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.

Email: dilip_davda@rediffmail.com

InfoBeans Technologies IPO FAQs

  1. 1. Why InfoBeans Technologies IPO?

    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.

  2. 2. How is InfoBeans Technologies IPO?

    Read the InfoBeans Technologies IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. InfoBeans Technologies IPO what should investors do?

    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 in the above answer.

  4. 4. Is InfoBeans Technologies IPO good?

    Our recommendation for InfoBeans Technologies IPO is to subscribe for long term.

  5. 5. Is InfoBeans Technologies IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the InfoBeans Technologies IPO.

  6. 6. When will InfoBeans Technologies IPO allotment status?

    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.

  7. 7. When will InfoBeans Technologies IPO list?

    The InfoBeans Technologies IPO will list on Tuesday, May 2, 2017, at NSE SME.