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IRIS Business BSE SME IPO review (Avoid)

Review By Dilip Davda on Sep 27, 2017

IRIS Business Services Ltd. (IRIS) is a provider of software products for compliance, data and analytics globally. It has created a name in the global RegTech Industry with its wide range of products. Its client includes Regulators including Central Banks, Business Registries, Capital Market Regulators and Stock Exchanges. It also provides solutions to the regulated including Corporate, Banks, Mutual Funds. It has recently launched a filing platform IRISGST to help business comply with the GST regime. It is in the process of developing DCP ( a data repository solution). IRIS is active in the global XBRL community.

To part finance its debt repayment, product development, sales and marketing plans and general corpus fund needs, IRIS is coming out with a maiden IPO of 5004000 equity share of Rs. 10 each at a fixed price of Rs.32 per share to mobilize Rs. 16.01 crore. Issue opens for subscription on 29.09.17 and will close on 04.10.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 26.51% of the post issue paid up capital of the company. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Having issued initial equity since incorporation till September 2007 at par, it raised further equity in the price range of Rs. 30.30 to Rs. 85.41 per share between March 2010 and June 2011. It has also issued bonus shares in the ratio of 5 for 1 in March 2010 and 1 for1 in September 2017. Post issue its current paid up equity capital of Rs. 13.88 crore will stand enhanced to Rs. 18.88 crore.

Cost of acquisition of shares by promotes is shown as Rs. 0.13 per share for one director and for others it has shown NA remark.

On performance front, IRIS has (on a consolidated basis) posted revenue/net profits of Rs. 68.46 cr. / Rs. 8.90 cr. (FY14), Rs. 56.33 cr. / Rs. 2.95 cr. (FY15), Rs. 32.91 cr. / Rs. – (7.54) cr. (FY16) and Rs. 27.54 cr. / Rs. – (9.64) cr. (FY17). Thus for last four fiscals its top line is declining and past two fiscal it has incurred heavy losses. For last three fiscals it has posted an average negative EPS of Rs. 4.93 and average negative RoNW of -32.80% on an equity capital of Rs. 6.94 crore. Issue is priced at a P/BV of 2.32. Looking at empty coffins and poor performance with negative earnings, issue is highly priced as it has negative P/E. As per prospectus details, it has no listed peers to compare with.

On merchant banker’s front, this is the 53rd mandate from its stable. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.

Conclusion: Highly priced issue with negative earnings may be given a miss.


Conclusion / Investment Strategy

Highly priced issue with negative earnings may be given a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 27, 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

IRIS Business IPO FAQs

  1. 1. Why IRIS Business IPO?

    The initial public offer (IPO) of IRIS Business Services Ltd offers an early investment opportunity in IRIS Business Services Ltd. A stock market investor can buy IRIS Business IPO shares by applying in IPO before IRIS Business Services Ltd shares get listed at the stock exchanges. An investor could invest in IRIS Business IPO for short term listing gain or a long term.

  2. 2. How is IRIS Business IPO?

    Read the IRIS Business IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. IRIS Business IPO what should investors do?

    IRIS Business IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the IRIS Business IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is IRIS Business IPO good?

    Our recommendation for IRIS Business IPO is to avoid.

  5. 5. Is IRIS Business IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the IRIS Business IPO.

  6. 6. When will IRIS Business IPO allotment status?

    The IRIS Business IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit IRIS Business IPO allotment status to check.

  7. 7. When will IRIS Business IPO list?

    The IRIS Business IPO will list on Wednesday, October 11, 2017, at BSE SME.