Tutorial Point BSE SME IPO review (May apply)

Review By Dilip Davda on Sep 26, 2019

•    TPIL is an online education service provider company.
•    The company has a good ranking on Alexa Ranking globally.
•    TPIL's "Tutorix" initiative augurs well for future prospects.
•    The company has appointed Ayushman Khurana as it's Brand Ambassador.
•    Investment may be considered for the long term.
 
ABOUT COMPANY:
Tutorial Point (India) Ltd. (TPIL) is an online education service provider, is presently working towards publishing high-quality educational content, notes, videos & resources (e.g. coding terminals, development tools, articles, questions & answers) to students as well as IT professionals worldwide. Its website was launched with a single tutorial on HTML and elated by the response that it generated, the company worked its way to adding fresh tutorials to company's repository which now proudly flaunts a wealth of tutorials and allied articles on topics ranging from programming languages to web designing to academics and much more. TPIL followed this up by launching an online coding terminal tool "Coding Ground" for websites wherein a user can create, edit, compile, execute and verify program and generate a short link that can be embedded in with the user's website. The company also provides a platform to allow users (students & tutors) to connect directly and avail the services listed on the website.
 
TPIL's Worldwide & Indian ALEXA RANKING as on August 22nd, 2019 is 495th & 91st respectively. It means that the company's website (https://www.tutorialspoint.com/) is 495th & 91st most visited website worldwide and in India respectively. In FY 2018-19, it had around 128.78 million readers worldwide who read more than 645.54 million pages of its tutorials. With approx. than 257.42 million sessions held in the above period with an average session duration of around 4 mins, the company has created a strong base in the online education services Worldwide. Its bounce rate is around 64.50% which is quite low.
 
Around 45.85% of its users are female and 54.15% are male. And around 61% of viewers are in the age bracket of 18 to 34 years, 28% are in the age bracket of 35 to 54 years & rest 11% of users lie in the age bracket of 55+ years. These metrics help TPIL to identify the type of content that is required to be published and then create such tutorials in minimum turnaround time.
 


In 2016, the company started video tutorials with an intention to solve the concepts in a clear and simpler way. Thus, it integrated its website with YouTube to provide seamless streaming of videos and user experience is maximized. TPIL's videos are also available on YouTube so that if a user just wants to go for lectures it does not have to scroll through the company's website. Lately, YouTube has helped it immensely to increase the company's reach and popularity among users. TPIL's YouTube channel has 12,000+ videos currently playing. With 8 lakhs+ subscribers and more than 80 million views, its channel has a mass reach in 240 countries (includes gulf and republics). Total watch time on our videos has crossed 232 million minutes.
 
The Company is initiating a new project, namely "Tutorix" that offers an engaging educational kit for Math& Science for 6th-12th classes along with IIT-JEE & NEET exams preparation, and collaborates students, tutors and parents to enrich the learning experience at an affordable cost. The new solution lets the company enter into a Freemium model of revenue rather than just being dependent on 'Contextual Advertising', which currently accounts for more than 90% of its revenue. The content on "Tutorix" can be accessed by visiting www.tutorix.com.
 
ISSUE DETAILS/CAPITAL HISTORY:
To part finance its plans to create, develop and market e-tutorial content for 6th-12th standard, IIT/JEE & NEET / acquire related IT hardware (Rs. 13.81 cr.) and general corpus funds, TPIL is coming out with a maiden IPO of 3140000 equity shares of Rs. 10 each via book building route. It has fixed a price band of Rs. 60 - Rs.64 and mulls raising Rs. 18.84 cr. - Rs. 20.10 cr. based on the lower and upper price bands. The issue opens for subscription on 30.09.19 and will close on 04.10.19. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 29.48% of the post issue paid-up capital of the company.
 
The issue is solely lead managed by Holani Consultants Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue.  Maverick Share Brokers Pvt. Ltd. is the market maker for this IPO. The company raised initial equity at par and then has issued bonus shares in the ratio of 750 shares for every 1 share held. The average cost of acquisition of shares by the promoters is Rs. 0.013 per share.
 
Post issue, TPIL's current paid-up equity capital of Rs. 7.51 cr. will stand enhanced to Rs. 10.65 cr.
 
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, TPIL's turnover/net profits were Rs. 10.37 cr. / Rs. 2.93 cr. (FY17), Rs. 10.25 cr. / Rs. 3.71 cr. (FY18) and Rs. 10.35 cr. / Rs. 4.03 cr. (FY19). It has posted a growth of 17.18% CAGR in its profit after tax in the last three fiscals. For the last three fiscals, TPIL has posted an average EPS of Rs. 4.98 and an average RoNW of 40.91%. The issue is priced at a P/BV of 3.84 based on its NAV of Rs. 16.66 as on 31.03.19. While its top-line remained static, its bottom line has shown growth that is attributed to efficient cost management and no additional cost is now incurred for content creations.  However, since it is developing "Tutorix", staffing expenses on this account is being provided in intangible assets under development and charged to balance sheet. The final implication will be done for such expenses at the time of amortization. Currently, Tutorix initiative is being funded from internal accruals and major chunk will be used from the IPO proceeds.
 
If we consider FY19 earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 16.9. Thus issue appears fully priced on the basis of current financial data.
 
COMPARISION WITH LISTED PEERS:
As per offer documents, it has no listed peers to compare with.
 
MERCHANT BANKER'S TRACK RECORDS:
On merchant banker's front, this is the 4th mandate from its stable. Out of last 3 listings, 1 issue opened at par and the rest 2 with premiums ranging from 6.88% to 49.12% on the day of listings.


Conclusion / Investment Strategy

With Digital India initiatives and major thrust for education is sure to lift the e-learning segment. Although the issue appears fully priced on the basis of current financial data, it is poised for bright prospects once Tutorix initiative goes on stream. Investors may consider investment for the long term.

Review By Dilip Davda on Sep 26, 2019

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

Tutorials Point IPO FAQs

  1. 1. Why Tutorials Point IPO?

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

  2. 2. How is Tutorials Point IPO?

    Read the Tutorials Point IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Tutorials Point IPO what should investors do?

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

  4. 4. Is Tutorials Point IPO good?

    Our recommendation for Tutorials Point IPO is to subscribe for long term.

  5. 5. Is Tutorials Point IPO worth Investing?

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

  6. 6. When will Tutorials Point IPO allotment status?

    The Tutorials Point IPO allotment status will be available on or around Oct 10, 2019. The allotted shares will be credited in demat account by Oct 14, 2019. Visit Tutorials Point IPO allotment status to check.

  7. 7. When will Tutorials Point IPO list?

    The Tutorials Point IPO list date is not yet available. The Tutorials Point IPO is planned to list on Oct 15, 2019, at BSE SME.








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