Ksolves India Limited

Started in 2014, Ksolves India Ltd is a software services and product company. It is engaged in providing enterprise solutions, software development, consulting, and Information Technology solutions for clients. The company works for different sectors such as Healthcare, Telecom, E-commerce, Real Estate, and Finance. It provides digital solutions to client organizations to develop powerful applications, maintain software systems, and enhance the functionality of the software as per the business requirements. The applications created by the company include automation of routine business functions to make them accurate, faster, and easier and increase the channels for better functioning. Ksolves has acquired Kartik Solutions Private Limited in 2019 and it has become the wholly-owned subsidiary of the company. Kartik Solutions provides IT and IT-enabled services including web, mobile, cloud, and e-commerce solutions. The company along with its subsidiary has a presence over 30 countries and major sales (80%) from North America. On the financial performance front, for the last three fiscals, KIL has on a standalone basis reported turnover/net profits of Rs. 3.41 cr. / Rs. 0.06 cr. (FY18), Rs. 5.43 cr. / Rs. 0.16 cr. (FY19) and Rs. 8.15 cr. / Rs. 0.67 cr. (FY20). On a consolidated basis, KIL has earned a net profit of Rs. 0.68 cr. on a turnover of Rs. 10.14 cr. for the financial year 2019-20. For the last three fiscals, KIL has posted an average EPS of Rs. 8.16 and an average RoNW of 69.90% (on a weighted average basis). The issue is priced at a P/BV of around 0.23 based on its NAV of Rs. 433.95 (Rs. 437.95 on a consolidated basis) as on 31.03.2020 and at a P/BV of around 3.03 on the basis of post-issue NAV of Rs. 32.98 (Rs. 33.04 on a consolidated basis). If we consider the latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of 21.8 making it aggressively priced offer. KIL has declared dividend at 778.9% for the financial year 2018-19. On BRLM's front for Shreni Shares Private Limited, this is the 2nd IPO in the last two fiscals (including the ongoing). The only listing in FY20 opened at par on the day of listing and currently trading above issue price. ( As on 02.07.2020 ) Company has growth in financials, RoNW is 77.62% and issue looks aggressively priced as per FY20 earnings. This industry has very tough competition from listed or local players and its expected to grow in future also. Considering all these, we give 'NEUTRAL' rating to this SME IPO.

• 1 Mr. Ratan Kumar Srivastava
• 2 Mrs. Deepali Verma