Started in 2000, Nihilent Limited is a Pune based a global business consulting and IT solutions integration company. The service offerings include: 1. Consulting: The business consulting engagements for industry transformation and change management starts with analysing various aspects of the client's business using the design thinking approach and using this data along with inputs from the management to define and execute change strategy around the areas of product, process, people and technology.2. Analytics: The Company has significant capability in data sciences, deep learning, artificial intelligence, machine learning, natural language processing, cloud, IoT, blockchain and robotics which enables them to analyse data and implement solutions for organizations across industry verticals to increase their operational efficiency, productivity, security by leveraging this data.3. Information Technology Solutions and Services: The Company has capabilities in cloud services, data and systems integration services, SAP Leonardo, S4 HANA, CRM, blockchain development, product engineering, DevOps, and Scaled Agile FrameworkTM, besides conventional IT programs which enable them to provide application development and maintenance, testing/QA and solution implementation services to the clients. Over the years Nihilent has helped over 750 clients in more than thirty countries and deployed solutions across business functions. They have developed proprietary frameworks and methodologies in-house, based on competencies gained on assignments and the understanding of businesses, to aid the service offerings. These include tools such as MC3 a patented tool which helps them provide the change management solutions, 14 Signals a tool which is used for evaluating perception, experience and aspirations of a customer, SightN2 a framework for digital marketing. Company has also developed its own 'Design Thinking' and 'Product Lifecycle and Development' frameworks. The key industries to which Nihilent provide the services include BFSI, media and entertainment, life sciences and healthcare, manufacturing, mobility and telecommunications, retail and consumer products. They have also been engaged by the government and public-sector companies in several countries on transformation and innovation programs. They key clients include Nedbank Limited, MultiChoice Support Services Pty. Ltd, Amano McGann, American Enterprise Group Inc., Assetic Australia Pty Ltd., The Banking Association South Africa, Goodman Fielder, SuperSport International (Pty) Ltd and Bajaj Finance Limited. In the year 2000, Nihilent set up a software engineering facility in Pune. They also have software development facilities located at Mumbai, Kolkata, Chennai, Minneapolis, Dallas and Johannesburg. The Company has also invested in a sophisticated 'User Experience Laboratory' ('UX Labs'), located at its head office in Pune, and plans to open another UX Lab at Mumbai. These UX Labs allow the clients to capture their real-world customer journeys and simulates model scenarios to enable them to build their digital platforms from experiences. The UX Labs can also be used by customers for carrying out end user testing of their products and solutions as well as for ideation workshops for their upcoming initiatives. As on June 30, 2018, Nihilent had more than 1,800 employees across 18 offices located in India, South Africa, Nigeria, United States, United Kingdom, Ireland and Australia. As per financial performance, ICFL has posted total income/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs. 210.80 cr. (FY17). For upto Q3 of FY18, it has reported net profit of Rs. 164.08 cr. on total revenue of Rs. 585.95 cr. So company has posted consistent growth over last couple of years. ICFL has posted an average EPS of Rs. 25.53 and average RoNW of 11.62% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of 263.96 on 31.12.17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 24. As per RHP, industry average P/E ratio is 28.66 and listed peers comparison shown in above table. So issue looks fully priced. On BRLM's front, five merchant bankers associated with this issue and have handled 58 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 6 issues opened below their offer price and 4 opened at par on listing dates. As per financials, company's growth is consistent and very good, RoNW is 11.62% for last three fiscals and issue is priced at P/E of around 24 as per latest earnings. Company is an NBFC with principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Last two business segments (Vehicle Finance & Housing Finance) are started in recent past and it may give further boost to company's growth, but increasing bond yields and FD rates may put pressure on margins. So we give "SUBSCRIBE FOR LONG TERM" rating to this IPO.
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