Tracxn Technologies’ initial public offering (IPO), worth Rs 309.38 crore, began accepting subscriptions on Monday. A total of 38,672,208 equity shares were offered for sale as part of the issuance by the private market intelligence platform situated in Bengaluru, which was conducted in the Rs 75–80 price range. Binny Bansal, Sachin Bansal, Neha Singh, and Abhishek Goyal, in addition to a few other investors, are among the selling stockholders.
The company distributed 17,402,494 shares at a price of Rs 80 per share in order to secure Rs 139.22 crore from anchor investors prior to its initial public offering. In FY22 and FY21, the company reported losses, but in the June quarter of FY23, profits were reported. According to early trading reports, analysts are wary of the IPO. At most, the investment might be suited for those who have a pretty long-term perspective. Analysts noted that attrition at the company is still high and that the usage of open-source software by the corporation could lead to legal disputes.
Choice Broking has advised investors to “avoid” the issue, while Arihant Capital has rated it as “subscribe with a long-term.” Religare has rated the situation as “neutral,” while ICICIdirect has not given the situation a rating.
“There isn’t a comparable company in the listed industry that operates in a way that the company does. Tracxn is asking for an EV/Sales multiple of 12.3 times at higher price bands, which seems excessive for a business that is operating at a loss. Given Tracxn’s existing double-digit attrition rate (49 percent in FY22 and 13.8% in Q1 FY23) and the high attrition rate in the IT-enabled sector, we are cautiously optimistic about the company’s attempts to reduce staff costs “said Choice Broking.
Additionally, it stated that partial or complete exits by PE investors raise questions about the long-term prospective growth prospects while giving the situation a “AVOID” grade.
Arihant Capital Markets believes the issue is properly priced at 12.7 times the price-to-sales for FY22.
“The business is a major player on the global stage and one of the top 5 in its industry. With advantages in cost arbitrage, significant operating leverage, a solid technology foundation, and extensive data coverage, Tracxns position is strengthened. In the first quarter of FY23, it broke even and declared gains “said Arihant Capital Markets.
“In terms of financials, the company’s revenue increased at a CAGR of 30.4%. Despite rising revenues, Ebitda and PAT have been in the red for the last two years. So, an investor needs to keep an eye on the FY23 financials, with the caveat that industrywide competitive intensity is strong. This brokerage rates the situation as “neutral.” Regulation Securities
In the black market, there was no premium being paid for the problem.
Investors may make a minimum offer of 185 shares and a maximum offer in multiples of 185 shares.
The NRJN Family Trust, Ratan Tata, Neeraj Arora, Sachin Bansal, Binny Bansal, Amit Ranjan, Girish Mathrubootham, Anand Rajaraman, Amit Singhal, and Ashish Gupta, as well as Elevation Capital, Accel Partners, Sequoia Capital, Prime Venture Partners, and KB Investments have all invested in Tracxn since it was founded in 2012 by Neha Singh and Abhishek Go
Through its subscription-based platform, the company provides customers with private corporate data for deal sourcing, identifying M&A targets, deal diligence, analysis, and tracking emerging patterns across industries and markets, among other applications. Analysts noted that Tracxn Technologies runs a Software as a Service (SaaS)-based platform and offers an asset-light business model.
As of June 30, 2022, Tracxn has scanned more than 662 million online domains and had over 1.84 million entities categorised across 2,003 Feeds throughout industries, sectors, sub-sectors, locations, affiliations, and networks globally.
As of June 30, 2022, the company has 3,271 users across 1,139 Customer Accounts in more than 58 countries, and certain Fortune 500 companies and/or their affiliates were among its clients.
The company receives more than 70% of its revenue from sources outside of India. Nearly 29% of its revenues in FY22 came from India, 27% from the US, and 44% from other countries.
In FY22, Tracxn Technologies reported an increase in operational revenue of 44.94% to Rs 63.45 crore from Rs 43.78 crore, driven by an increase in revenue from the sale of subscription services for its platform.
Compared to a restated loss of Rs 5.35 crore for FY21, the restated loss for FY22 was reduced to Rs 4.85 crore. Revenues for the June quarter increased by 22.93% to Rs 18.40 crore from Rs 14.97 crore in the corresponding quarter last year. The quarter’s net profit was Rs 0.84 crore as opposed to the quarter’s loss of Rs 0.72 crore the year prior.
The registrar for the issuance is Link Intime India Private, and IIFL Securities is the sole book-running lead manager.