Tracxn Technologies Limited

Started in 2013, Tracxn Technologies Limited provides market intelligence data for private companies. The company's extensive global database and customized solutions and features allow its customers to source and track companies across sectors and geographies to address their requirements. The company is ranked among the top five players globally in terms of the number of companies profiled offering data on private market companies across sectors and geographies. The company has an asset light business model and operate a Software as a Service ("SaaS")-based platform, Tracxn, that scanned over 662 million web domains, and profiled over 1.84 million entities across 2,003 Feeds categorized across industries, sectors, sub-sectors, geographies, affiliations and networks globally, as of May 31, 2021. The company has 3,271 users across 1,139 Customer Accounts in over 58 countries, as of June 30, 2022, and its customers include several Fortune 500 companies and/or their affiliates. The company offers private company data to its customers for deal sourcing, identifying M&A targets, deal diligence, analysis, and tracking emerging themes across industries and markets, among other uses, through its Tracxn platform. As per financial performance, Tracxn Technologies Limited has posted total income/net profits of Rs 66.83 Cr / Rs 12.49 Cr (FY19), Rs 6.31 Cr / Rs (54.83) Cr (FY20), Rs 55.74 Cr / Rs (4.15) Cr (FY21), Rs 65.16 Cr / Rs (4.85) Cr (FY22 and Rs 19.08 Cr / Rs 0.92 Cr (Q1 FY23). So company has posted zig-zag result and losses in last 3 years. They have posted an average EPS of Rs. (1.67) and average RoNW of (26.42)% for last 3 fiscals. Issue is priced at a P/BV of 34.93 as per NAV of 2.29 on 30.06.22. If we attribute latest annualized earnings of FY23 on fully diluted equity post issue, then asking price is at a P/E of around 217, which looks very aggressively priced. As per RHP, there are no listed peers. On BRLM's front,  lead managers are associated with this IPO, and have handled around 11 IPOs in last three fiscals.IIFL Securities Limited: This is 29th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining opened above issue on the day of listing. As of now, 3 are trading below issue price and other are trading above issue price. ( As on 04.10.22) As per financials, Tracxn Technologies has shown zigzag results, RoNW is (23.49)% and as per annualized FY23 earnings P/E is 217, so IPO looks very aggressively priced. Company is in SaaS (Software as a Service) business and has huge potential for growth, but recent performance is not encouraging. Performance of BRLM is good. So, we are giving AVOID rating to this IPO.

• 1 Neha Singh
• 2 Abhishek Goyal