TAC Infosec Limited is engaged in the business of providing risk-based vulnerability management and assessment solutions, cybersecurity quantification and services of Penetration testing to organizations of any scale, size, and business through “SaaS model”. The company offers security software products and solutions both in India and internationally. The end customers are Banks and financial Institutions, government regulatory bodies and departments, large-scale enterprises (including business offices) like HDFC, Bandhan Bank, BSE, National Payments Corporation of India, DSP investment Managers Private Limited, Motilal Oswal Financial Services Limited and NSDL e-Governance. The flagship software product is ESOF (Enterprise Security in One Framework) which was launched in 2018. ESOF is a vulnerability management platform consisting of various product portfolio namely ESOF Appsec, ESOF VMP, ESOF VACA, ESOF PCI ASV, ESOF CRQ. All the products launched under ESOF Platform have wide range of applications ranging from vulnerability management solutions for web and application-based data, compliance assessment, and cyber risk quantification. Vulnerability Management is the continuous process of identifying, assessing, prioritizing, mitigating, and remediating the vulnerabilities across the complete Information Technology infrastructure of the organization. Cybersecurity of the organizations needs to be monitored in real-time and remediated as soon as possible to avoid attacks, this activity is often overseen by organizations through vulnerability management tools or products. While, Risk-Based Vulnerability Management (RBVM) is the process of prioritizing vulnerabilities for remediation based on the level of risk each vulnerability discovered, poses to your organization and IT Infrastructure. The RBVM method allows the organization to prioritize their vulnerabilities discovered on the basis of the severity, making it time and cost-effective while having a concrete cybersecurity process in place. ESOF offers a robust vulnerability assessment mechanism that scans and identifies potential security loopholes within the IT infrastructure and along with configuration assessment, it ensures that IT systems are not only free from vulnerabilities but also configured optimally to resist potential threats. Also, ESOF’s auto-prioritization feature utilizes advanced algorithms to rank vulnerabilities based on their severity, potential impact, and exploitability, ensuring that critical issues are addressed promptly. Apart from above, ESOF also provides Asset Tiering, Business Unit Regrouping and Cyber score services. These services, coupled with risk quantification, provide senior management and board members with a well-informed and strategically planned approach to navigating the challenges and opportunities within their organizations. ESOF platform is more than just a vulnerability management tool as it provides comprehensive framework that empowers organizations to navigate the complex cybersecurity landscape. As per financial performance, TAC Infosec Limited has posted total income / net profits of Rs 5.16 Cr / Rs 0.61 Cr (FY21), Rs 5.24 Cr / Rs 0.61 Cr (FY22), Rs 10.14 Cr / Rs 5.07 Cr (FY23) and Rs 5.31 Cr / Rs 1.95 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 3.71 and average RoNW of 45.88% for last three fiscals. Issue is priced at a P/BV of 8.42 as per NAV of 12.59 as on 30.09.2023. 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 182.70, 21.90 and 28.50 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 32 SME IPOs in last 2 year. From last 16 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 16 SME IPOs, four are trading below issue price and remaining trading above or at par issue price. ( As on 21.03.24 ) As per financials, TAC Infosec Limited has shown good results, RoNW is 66.05% and P/E is respectively 182.70, 21.90 and 28.50 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO is very surprising. Company is in business of offering security software products and solutions both in India and internationally. 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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