Esconet Technologies Private Limited, founded in 2012, is engaged in the business of meeting a wide range of IT requirements such as high-performance supercomputing solutions, data centre facilities, encompassing storage servers, network security, virtualization, and data protection. The comprehensive solutions cater to the needs of SMEs, large enterprises, and public sector clients. Further more, Esconet extend its capabilities into the cloud services domain through its wholly owned subsidiary, ZeaCloud Services, ensuring that the clients have access to cutting-edge technology and a seamless IT infrastructure experience. Throughout this journey, Esconet has garnered not only experience but also the pool of clientele base of private and public sector organizations mentioned below. This positive evolution showcases the commitment to excellence, innovation, and comprehensive client support. As a trusted partner, they are delivering not just solutions, but tailored strategies that empower the clients to thrive in the rapidly evolving landscape of technology. Recognizing the demand in the Indian market, Esconet introduced its brand, HexaData, specializing in high-performance Servers, Workstations, and storage systems. Additionally, Esconet's strategic collaboration with NVIDIA has resulted the growth in the Artificial Intelligence (AI) and Machine Learning (ML) domain, enhancing the servers and workstations. In 2022, with a view to expand the services horizon, the promoters of Esconet established ZeaCloud Services Private Limited (Hereinafter refer as “ZeaCloud Services”) and later on in 2023 acquired ZeaCloud Services through a Share Swap arrangement as a wholly owned subsidiary. ZeaCloud Services, specializes in providing a comprehensive range of cloud-based services through their brand name Availablous to meet various business needs such as disaster recovery services, managed cloud services, private cloud, DaaS services. As per financial performance, Esconet Technologies Limited has posted total income / net profits of Rs 44.20 Cr / Rs (1.00) Cr (FY21), Rs 68.59 Cr / Rs 0.72 Cr (FY22), Rs 96.91 Cr / Rs 3.18 Cr (FY23) and Rs 71.47 Cr / Rs 3.05 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 20.77 and average RoNW of 27.64% for last three fiscals. Issue is priced at a P/BV of 2.69 as per NAV of 31.19 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 143.10, 32.61 and 16.99 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Corporate Capital Ventures Private Limited is associated with this SME IPO and handled 10 SME IPOs and 1 main board IPO in last 3 year. From last 10 SME IPOs, two opened below issue price and remaining opened above issue price or at par on the day of listing and from last 1 main board IPO that is opened above issue price. As of now from last 10 SME IPOs, one is trading below issue price and remaining are trading above issue price and from last 1 main board IPO that is trading above issue price.( As on 13.02.24 ) As per financials, Esconet Technologies Limited has shown good growth, RoNW is 54.83% and P/E is respectively 143.10, 32.61 and 16.99 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is engaged in business of IT hardware, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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