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Review By Dilip Davda on May 26, 2023
• IRSL is a tech-oriented work intermediation platform as a B2B Human Cloud Company.
• It has posted growth in its top and bottom lines for the reported periods.
• Considering customers' responses, the management is confident in maintaining the trends.
• Based on its FY23 financial performance, the issue appears reasonably priced.
• Investors may park funds for medium to long-term rewards.
ABOUT COMPANY:
Infollion Research Services Ltd. (IRSL) is engaged in a tech-oriented work intermediation platform as a B2B Human cloud company. The company helps its clients by enabling knowledge-sharing sessions and provides flexi-staffing solutions to enable businesses to draw actionable insights from people who have been there and done that.
Its business model is primarily a work intermediation platform within the definition of B2B Human Cloud companies. IRSL arranges contractual work arrangements for clients by identifying, screening, vetting, and matching work requirements based on various parameters such as nature, duration, objective, location, and pricing. It has a strong compliance framework to back in-house research and networking capabilities enabling it to deliver world-class hiring services to clients.
The Company's website www.infollion.com is a tech-oriented platform and all Services are rendered to this platform along with the onboarding of the experts who provide services that fulfil the needs of clients. IRSL is a tech-oriented marketplace, operating in the B2B Human Cloud segment, catering to on-demand contingent hiring and work arrangements with senior management talent, subject matter experts, and high-ranking, seasoned professionals. It provides a platform for workers or knowledge providers (gig workers) and employers or knowledge seekers to connect and find synergetic outcomes. Its key clients include top-tier Global Management Consulting firms, renowned Private Equity funds, Hedge funds, and mid-tier Corporates.
IRSL's proprietary technology stack and research capabilities empower it to assist clients in connecting with custom-curated, precise, and vetted subject matter experts. The company operates in the premium segment of the gig economy and is one of the enablers of contingent hiring, temporary workforce management, contracting SOW employees, high-level independent consultations, knowledge tours, and more. It caters to global hiring requirements for domestic and international clients. Its mission is to become the largest paymaster of senior management talent in every geography it operates.
IRSL's experts' network as of the date of filing this Red Herring Prospectus consists of 62,194 experts which include 10,573 international experts spanning across the globe and 51,621 domestic experts spans across all corners of India and almost representing every industry function. Its experts who are from senior management, subject matter experts, and high-ranking, seasoned professionals collectively form expert networks and are known as network members. IRSL's success depends on the insights, opinions or viewpoints of experts. As of April 30, 2023, it had 117 employees on its payroll.
According to the management, this segment has entry barriers as it takes a pretty long time to establish the desired level of experts and the solutions to the needs of customers. Establishing the customers too takes a long and thus the first mover in this segment always remains the king. IRSL is the first mover in India and will continue to enjoy its place. With the response received from the customers, the company is confident of maintaining the trends going forward.
ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with a maiden IPO of 2616000 equity shares of Rs. 10 each (approx. Rs. 21.45 cr.) via a book-building route. The issue comprises 2224000 fresh equity issue (approx. Rs. 18.24 cr. at the upper price band) and an Offer for Sale (OFS) of 392000 equity shares (approx. Rs. 3.21 cr. at the upper price band). The company has announced a price band of Rs. 80 - Rs. 82 per share. The issue opens for subscription on May 29, 2023, and will close on May 31, 2023. The minimum application to be made is for 1600 shares and in multiples thereon, thereafter. The issue constitutes 26.99% of the post-IPO paid-up equity capital of the company. Post allotment, shares will be listed on NSE SME Emerge.
The offer includes a reservation of up to 132800 equity shares for the market maker and the net offer is allocated as not more than 1208000 shares for QIBs, not less than 404800 shares for HNIs and not less than 870400 shares for Retail investors. From the net proceeds of the fresh issue, the company will utilize Rs. 6.00 cr. for expansion of the current service line in the US and Western Europe regions, Rs. 4.08 cr. for Pex-Panel-adding new categories of freelancers, Rs. 3.70 cr. for technology development and the rest for general corporate purposes.
Holani Consultants Pvt. Ltd. is the sole lead manager and Link Intime India Pvt. Ltd. is the registrar of the issue. Holani Consultants Pvt. Ltd. is also the market maker for the company.
Having issued initial equity shares at par value, the company issued further equity shares in the price range of Rs. 150 - Rs. 5102 per share between January 2011 and August 2022. It issued bonus shares in the ratio of 5 for 1 in December 2022. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 0.02 and Rs. 10.18 per share.
Post-IPO, IRSL's current paid-up equity capital of Rs. 7.47 cr. will stand enhanced to Rs. 9.69 cr. Based on the upper price band, the company is looking for a market cap of Rs. 79.47 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, IRSL has posted a total income of Rs. 16.07 cr. / Rs. 2.08 cr. (FY21), Rs. 22.20 cr. / Rs. 3.41 cr. (FY22), and Rs. 35.30 cr. / Rs. 5.58 cr. (FY23). Thus it has marked steady growth in its top and bottom lines for the reported periods.
For the last three fiscals, IRSL has reported an average EPS of Rs. 5.85 and an average RoNW of 33.24%. The issue is priced at a P/BV of 3.83 based on its NAV of Rs. 21.44 as of March 31, 2023, and at a P/BV of 2.32 based on its post-IPO NAV of Rs. 35.34 (at the upper cap).
If we attribute FY23 earnings to post-IPO fully diluted paid-up equity capital, the asking price is at a P/E of around 14.24. Thus the issue appears reasonably priced.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy post-listing, based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.
MERCHANT BANKER'S TRACK RECORD:
This is the 5th mandate from Holani Consultants in the last three fiscals (including the ongoing one). Out of the last 4 listings, 1 opened at a discount and the rest were listed at premiums ranging from 4.94% to 100.26% on the listing date.
Review By Dilip Davda on May 26, 2023
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 Infollion Research Services Limited offers an early investment opportunity in Infollion Research Services Limited. A stock market investor can buy Infollion Research Services IPO shares by applying in IPO before Infollion Research Services Limited shares get listed at the stock exchanges. An investor could invest in Infollion Research Services IPO for short term listing gain or a long term.
Read the Infollion Research Services IPO recommendations by the leading analyst and leading stock brokers.
Infollion Research Services IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Infollion Research Services IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Infollion Research Services IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Infollion Research Services IPO.
The Infollion Research Services IPO allotment status will be available on or around June 5, 2023. The allotted shares will be credited in demat account by June 7, 2023. Visit Infollion Research Services IPO allotment status to check.
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