Reliable Data Services Limited

Started in 2001, Reliable Data Services is Delhi based IT service provider offering services in areas including management services, transaction processing services, human resources services and other allied services. Reliable Data provide these IT enabled services to banks, financial institutions and manufacturing industries. Company has entered into agreement with various leading MNC and Private Sector Banks like Standard Chartered Bank, Deutsche Bank, HSBC, HDFC Bank Ltd, ICICI Bank, Axis Bank, Citibank and Yes Bank for providing various support services. Agreements which RDSL has entered with banks are short term and long term depending upon the type of services and its terms and conditions. Reliable Data has expanded its business through its nine subsidiary companies. The services offered by the company as listed as below:1. Transaction Processing Services2. Human Resources Services3. Management Services4. Other Services On performance front, RDSL has (on a consolidated basis) posted turnover/net profits of Rs. 20.49 cr. / Rs. 1.48 cr. (Fy14), Rs. 24.72 cr. / Rs. 1.72 cr. (FY15), Rs. 26.40 cr. / Rs. 1.29 cr. (FY16) and Rs. 34.61 cr. / Rs. 1.62 cr. (FY17). Despite growth in top lines for last two fiscals, it has seen pressure on margins. RDSL has reported an average EPS of Rs. 2.55 and average RoNW of 16.30% for last three fiscals on an equity base of Rs. 1.00 crore. Issue is priced at a P/BV of 2.09. If we attribute latest earnings on fully diluted post issue equity then asking price is at a P/E of 30 plus against industry composite of around 18 P/E. Thus issue is highly priced. On merchant banker's front, this is the 6th mandate from its stable and last five listings have given between 4 to 25% gains on the day of listing. As per financials, company's growth is good in top line, but bottom line has shown pressure, RoNW is 16.30% for last three fiscals and issue is fully priced. So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Sanjay Kumar Pathak
• 2 Mr. Rakesh Jha
• 3 Mr. Sandeep Kumar Jha
• 4 Mr. Sunil Kumar Rai
• 5 Mr. Anil Kumar Jha