OFS Technologies IPO – Know the Subscription Details

by Ankit Jaiswal on Basic Finance, Equity Market

By Kumarjit Shill

Company overview

Bangalore based OFC technologies incorporated in 2008. Its business is centred on software development  and information technology and  is an outsourcing company. Company has its own ERP product division of the food processing industry. They help software driven businesses to design, develop, test and maintain their software products and application, whether they are hosted, incensed or mobile.

Object of the fresh issue

  • Strategic acquisition and joint venture (375.00 lac. )
  • General corporate purpose (18.62 lac.)
  • To meet issue expenses (32.38 lac. )
Issue date
Issue types
Issue size
Face value
Issue price
Lot size
Lead managers

Summary of the business

Company’s business is divided into 5 major categories.

  1. ERP solution
  2. Outsources product development
  3. Enterprise mobile development
  4. Industry solutions
  5. Independent testing

They are providing  software services to a variety of industries that they are claiming to generate good revenue; they are focusing in the three major industries namely  banking, healthcare and food processing. They are already entered into the food process industry, mainly in the marine food processing.

They are developing product for outsourcing and keeping some important factors in mind,

  • Scalable to handle both small and large clients.
  • Configurable to handle different customer operating scenarios.
  • Compelling your UI must attract you buyer eye and have features that differentiate you from your competition.
  • Multi-country – to handle different currencies and date formats.
  • Multi-lingual- to present the UI in different languages, including the ideographic ones, such as Chinese and Japanese that use double – byte representation and storage.
  • Multi-platform- to be able to run on UNIX, Windows, Apple, Android and Blackberry deployment environments.
  • Multi-tenancy- to support multiple customers on a single instance of your software for SaaS and other hosted environments while keeping customer data separate.

They are also developing application for phone, android, blackberry and windows.  Not only that they are industry specific.They can help make sure your test cases cover virtually 100% of your user cases and can even help you build a complete library of unit test cases that your developers can extend as they change the code.

Industry overview

India is the world’s largest sourcing destination for the information technology (IT) industry, accounting for approximately 67 per cent of the US$ 124-130 billion market. The industry employs about 10 million workforces. More importantly, the industry has led the economic transformation of the country and altered the perception of India in the global economy. India’s cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be the mainstay of its unique selling proposition (USP) in the global sourcing market. However, India is also gaining prominence in terms of intellectual capital with several global IT firms setting up their innovation centres in India.

Growth accelerator Industry

  • digital India initiative
  • Start up India , stand up India
  • e-commerce industry growth
  • banking and healthcare industry growth

Financial

 income30-Jun31-Mar-1531-Mar-1431-Mar-1331-Mar-1231-Mar-11
revenue from operations235.56459.6540.8520.7538.5659.97
less: excise duty
other operating income5.71.34.722.773.11
net revenue from operation
tottal revenuetotal income241.26460.9545.5723.5241.6759.97

 

expenses30-Jun31-Mar-1531-Mar-1431-Mar-1331-Mar-1231-Mar-11
finance charges3.211.460.220.030.04
employee benefits expense83.647.1131.52.5
Depreciation20.87103.66
other expenses48.89123.312.0520.8340.1156.74
total expenses 156.57275.5433.7720.8340.1459.28

 

profits 30-Jun31-Mar-1531-Mar-1431-Mar-1331-Mar-1231-Mar-11
restated profit before tax84.69185.4111.82.691.530.69
tax expenses30.0160.543.350.590.170.23
total profits56.41124.878.452.11.360.46

 

Charts are showing that company is generating revenue; its revenue shows a decent growth, and profit also supporting the fact. EPS of this company in FY 2015 stands at 3.04 where last three years average is RS 10.53, but the alarming factor is negative cash flow which we can see in company’s financial.

 

Management

Mr. JesudasPremkumar Sebastian:  aged 41 years, is a Bachelor of Engineering from Annamalai
University, Chidambaram, passed in the year 1995. He has completed advanced diploma in Computer application and programming in Bitech, Chennai. He has deep work experience in the Information Technology Sector.

Mr. Santiago Allwin Roger: aged 65 years is qualified in Master of Arts. He is a retired college professor and presently having private coaching centre for studies. He is the Independent Director of our Company.

Mr. Karthikeyan. T: aged 54 years has completed Master of Business Administration from Annamalai
University, Chidambaram. He is a Management Consultant providing service in the field of marketing and has more than 20 years of experience in marketing and product developments.

Mrs. Ruth Hilda Anthonysamy : aged 37 years is B.Sc., M.A (Personnel Management and Industrial
Relations) is an Human Resource Consultant. She is having more than 10 years working experience in Human Relations and related activities.

Most of the management are independent directors. The chief operating officer of this company has been appointed as the managing director of the company. The COO of the company is well qualified and has more than 16 years of experience in information technology activity. He has been appointed newly, so it will take some time to judge the management.

Litigations

There is no such outstanding litigation against this company.

Recommendation

Lot size of the IPO is high, and minimum required amount is Rs 150000, so it carries a high risk. Management is very new and so we need more time to judge the management but the financial seems ok. This IPO has no such optimistic factors so my recommendation would be not to bet on it.

Read Understanding Initial Public Offer (IPO) to understand what is an IPO and other key aspect attached to it.

You can also learn basic insight of IPO in NSE Academy Certified Stock Market For Beginners listed under Online NSE Academy Courses on Elearnmarkets.

 

 


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