Silver Touch Techno NSE SME IPO review (Apply at your own risk)

Review By Dilip Davda on Nov 9, 2017

Silver Touch Technologies Ltd. (STTL) is providing the Information Technology Solutions in the fields of system integration and software Services. STTL has grown with its global clientele, and now it is into multiple areas like System integration and Software Development. The Company is providing all end-to-end Information and Communication Technology (ICT) solution to its clients under a single umbrella. Initially, the primary functional areas were restricted to computer sales and maintenance. Building through a long path of more than two decades, presently Silver Touch is offering a variety of services in the field of Information Technology solutions to its clients. The Company has carried out several domestic and international Joint Ventures which have enabled the Company to expand its geographical reach and create diverse clientele. It has executed various projects in India and other countries including USA, UK, France, Australia, Middle East and Germany. STTL strives to constantly improve its software skills, adopting new and improved technologies on a regular basis to keep up with the constantly evolving world of technology. STTL is certified by ISO 9001:2008, ISO/IEC 27001: 2013, CMMI Maturity Level 5 and ISO 20000: 2011.

For listing gains, STTL is coming out with a maiden IPO of 3324000 equity shares of Rs. 10 each at a fixed price of Rs. 121 per share by way of offer for sale to mobilize Rs. 40.22 crore. Issue opens for subscription on 20.11.17 and will close on 23.11.17. Minimum application is to be made for 1000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Chartered Capital & Investment Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.39% of the post issue paid up capital of the company. From inception till 2008 it raised equity at par and in August 2017 it issued fresh equity at a price of Rs. 110 per share. It has also issued bonus shares in the ratio of 1 for 4 (March 2001), 5 for 2 (November 2007), 1 for 1 in May 2017. Being secondary issue, it’s paid up capital post issue remains same at Rs. 12.60 crore. The average cost of acquisitions of shares by promoters ranging from Rs. 3.25 to Rs. 4.35 per share.

On performance front, STTL has (on a consolidated basis) reported total revenue/net profits of Rs.109.71 cr. / Rs. 6.12 cr. (FY14), Rs.118.04 cr. / Rs. 2.61 cr. (FY15), Rs. 141.11 cr. / Rs. 3.06 cr. (FY16), Rs. 124.23 cr. / Rs. 4.05 cr. (FY17). For Q1 of current fiscal, it has posted net profit of Rs. 2.07 cr. on total revenue of Rs. 49.83 cr. It has reported an average EPS of Rs. 3.11 and average RoNW of 9.62% for last three fiscals (on an equity base of Rs. 5.60 crore). Issue is priced at a P/BV of 3.78 on the basis of post issue NAV. It suffered a setback in top line for FY17 and inconsistency in bottom lines. If we annualize latest earnings and attribute it on post issue paid up capital, then asking price is at a P/E of around 18 plus against peers trading at a P/E ranging from 4.55 to 36.93. Thus issue appears to be fully priced.

On merchant banker’s front, this is the 2nd mandate from its stable in past three years and the last listing was at par on the day it listed.

Conclusion: Risk savvy cash surplus investors may consider moderate investment in this fully priced issue for long term. (High risk – Low return).


Conclusion / Investment Strategy

Risk savvy cash surplus investors may consider moderate investment in this fully priced issue for long term. (High risk – Low return).

Review By Dilip Davda on Nov 9, 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

Silver Touch IPO FAQs

  1. 1. Why Silver Touch IPO?

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

  2. 2. How is Silver Touch IPO?

    Read the Silver Touch IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Silver Touch IPO what should investors do?

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

  4. 4. Is Silver Touch IPO good?

    Sorry, we didn't rate the Silver Touch IPO.

  5. 5. Is Silver Touch IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the Silver Touch IPO.

  6. 6. When will Silver Touch IPO allotment status?

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

  7. 7. When will Silver Touch IPO list?

    The Silver Touch IPO will list on Friday, December 1, 2017, at NSE SME.








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