Started in 2011, Mindpool Technologies Limited is a Pune based company engaged in the business of providing Oracle Consultancy Services, IT staffing and solutions, and Corporate Training Services. The company offers these services across industries including automotive and engineering, banking and financial services, healthcare, retail, telecom, and Entertainment in India and US. IT staffing & recruitment market comprises of software vendors, RPO companies, other third party service providers and end users. Software vendors are those companies that provide the software solutions to the IT enterprises for their in-house recruitment process, solutions to the RPO vendors and other third party service providers. IT enterprises either buy the software solution for their recruitment process or outsource their recruitment functions to other companies. RPO companies provide either specific recruitment services or complete end to end service package to the enterprises. Other third party service companies provide services including employment placement, staffing services, etc. As of March 31, 2018, the company has served 22 clients. Some of the key clients of the company include Clairvoyant India Private Limited, Herbalife International India Private Ltd, HTC Global Services (India) Private Ltd, Inspirage Software Consulting Private Limited, and Opalforce INC etc. The company has 103 employees on its payroll across various functions. On financial performance front, for last three fiscals, MTL has posted turnover/net profits (loss) of Rs. 20.78 cr. / Rs. – (0.33) cr. (FY16), Rs. 25.38 cr. / Rs. 1.29 cr. (FY17) and Rs. 20.43 cr. / Rs. 1.63 cr. (FY18). For first half of FY19, it has earned net profit of Rs. 1.46 cr. on a turnover of Rs. 10.81 cr. For FY18, though top line has shown decline, bottom line has shown improved margins. For FY18, trade receivables are around 6.66 Cr which is around 32.5% of total revenue and that is very high. For last three fiscals, it has posted an average EPS of Rs. 3.96 and an average RoNW of 12.17%. Issue is priced at a P/BV of 0.77 based on its NAV of Rs. 39.18 as on 30.09.18 and at a P/BV of 0.82 based on post issue NAV of Rs. 36.58. If we annualise latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of 5 thus issue appears reasonably priced. FY18 and first half of FY19 indicates towards stagnancy in top line that remains concern. As per RHP, there is no listed peers. On BRLM's front, for Hem Securities Limited this is the 34th IPO in last three fiscals. Last main board IPO from Hem Securities wasn't fully subscribed and need to be withdrawn. From last 10 IPOs, two opened below issue price and other listed with 1% to 20% premium on the day of listing. As of now, from last 10 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 12.02.19 ) Company's financial performance is good, but top-line is becoming stagnant, RoNW is 12.17% for last three fiscals and issue looks very reasonably priced. Major concern for the IPO is constant top-line and higher trade receivables. Performance of BRLM is average. So we give NEUTRAL rating to this SME IPO.
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