R K SWAMY Limited is integrated marketing service groups in India, offering a single-window solution for creative, media, data analytics and market research services. They offer a comprehensive range of services in the following interrelated and complementary business segments: (i) Integrated Marketing Communications, (ii) Customer Data Analytics and Marketing Technology ('Customer Data Analytics and MarTech'); and (iii) Full-Service Market Research (including customer experience measurement) and Syndicated Studies ('Full-Service Market Research'). They have a track record of over five decades, and have been serving leading companies such as Aditya Birla Sun Life AMC Limited, Cera Sanitaryware Limited, Dr. Reddy’s Laboratories Limited, E.I.D. Parry (India) Limited, Fujitsu General (India) Private Limited, Gemini Edibles and Fats India Limited, Havells India Limited, Hawkins Cookers Limited, Himalaya Wellness Company, Hindustan Petroleum Corporation Limited, ICICI Prudential Life Insurance Company Limited, IFB Industries Limited, Mahindra and Mahindra Limited, Oil and Natural Gas Corporation Limited, Royal Enfield (a unit of Eicher Motors), Shriram Finance Limited, Tata Play Limited, Ultratech Cement Limited, and Union Bank of India. They are a data driven integrated marketing services provider and all segments of the business use digital initiatives extensively. During Fiscal 2023 and the six months ended September 30, 2023, they released over 818 and 438 creative campaigns, respectively on behalf of the clients across various media outlets, handled over 97.69 and 140.05 terabytes (cumulatively for Fiscal 2023 and the six months ended September 30, 2023) of data and have conducted over 2.37 million and 1.44 million consumer interviews across quantitative, qualitative and telephonic surveys. The solutions and offerings are serviced by over 2,533 employees spread across 12 offices and 12 field locations across twelve cities, across the three business segments. The Customer Data Analytics and MarTech business segment includes: (a) customer data analytics; (b) delivery and management of customer experience; (c) online reputation management; (d) campaign management, campaign tracking; (e) customer relationship management tools; (f) customer insights, dashboards; (g) sentiment analysis; and (h) loyalty program management. There has been an increasing recognition and adoption of MarTech solutions by Indian businesses, driven by their pursuit to gain deeper insights into consumer behaviour, optimise marketing strategies and improve overall performance. One of the subsidiaries, Hansa Customer Equity was set up to address this need and has now been recognised among the top 10 groups within the Customer Data Analytics and MarTech services segment providing integrated marketing solutions and is a key player in the industry. The Integrated Marketing Communications business segment includes: (a) creative and digital content; (b) media (including digital); (c) events and activation planning, buying and executing; and (d) others including public relations, social media management, pharmaceutical communication. Social media advertising has become a prominent avenue, with platforms such as Facebook, Instagram, Twitter, and LinkedIn offering targeted advertising options, sponsored posts, and collaborations with influencers. The creative advertising teams create interactive and engaging campaigns for the clients, through which the clients are able to connect with a wide range of audiences and offer these consumers unique and memorable brand experiences. For examples of the creative offerings, please see the creative portfolio at www.rkswamy.com , www.hansaresearch.com and www.hansacequity.com . The Full-Service Market Research business segment includes: (a) customer/ audience segmentation; (b) consumer surveys; (c) customer experience measurement; (d) brand equity and customer satisfaction indices and (e) consumer intelligence. One of the subsidiaries, Hansa Research was set up to offer services such as customer/audience segmentation, consumer surveys, customer experience measurement, brand equity and customer satisfaction indices, consumer intelligence, through market research. The market research offerings provide companies relevant information about the effectiveness of their advertising and marketing campaigns by leveraging surveys and focus group discussions and analysing customer data. Hansa Research conducted the Indian Readership Survey for 10 years from 2003 to 2012, covering a total sample size of over 2 million individuals in in-person interviews. As per financial performance, R K SWAMY Limited has posted total income / net profits of Rs 183.22 Cr / Rs 3.08 Cr (FY21), Rs 244.97 Cr / Rs 19.26 Cr (FY22), Rs 299.91 Cr / Rs 31.26 Cr (FY23) and Rs 142.55 Cr / Rs 7.93 Cr (Q2 FY24). So as per previous financials data, company has shown growth, but H1 FY24 data indicates decline in revenue and net-profit. Company has an average EPS of Rs 5.07 and average RoNW of 17.36% for last three fiscals. Issue is priced at a P/BV of 8.73 as per NAV of 32.99 as on 30.09.23. 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 75.48, 46.50 and 91.63 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 80 IPOs in last three fiscals. SBI Capital Markets Limited : This is 25th Main Board IPO from this BRLM. From last 10 Main Board IPOs, four opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price.( As on 28.02.2024 ) IIFL Securities Limited : This is 44th Main Board IPO from this BRLM. From last 10 Main Board IPOs, two opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, all are trading above issue price.( As on 28.02.2024 ) Motilal Oswal Investment Advisors Limited : This is 14th Main Board IPO from this BRLM. From last 10 Main Board IPOs, two opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price.( As on 28.02.2024 ) As per financials, R K SWAMY Limited has shown good growth, RoNW is 22.20% and P/E is respectively 75.48, 46.50 and 91.63 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of integrated marketing service, which is highly competitive and fragmented. The sector is expected to grow at good rate in future and company has long term relationship with clients. 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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