Tranway Technologies Limited

Started in 2015, Karnataka- based Tranway Technologies Ltd is engaged in the business of Software product development, Software services, Software Testing and Development, Staffing Services, Human Resource Consulting, Contract Staffing, Manpower Supply Services, Recruitment Process Organisation (RPO), Training For Employability, and related services. The company also works as Technical Advisors, Purveyors, and Consultants for processed & applied technology, research & development and technical Know-how. The core business of Tranway Technologies is offering Staffing solutions and Payroll processing. The company outsources Tranway Payroll to the clients for managing their clients' on-roll employees. The company has total 35 employees on the date of prospectus. On the financial performance front, for the last three fiscals, Tranway Technologies Limited has posted turnover/ net profits of Rs. 3.12 cr. / Rs. 0.12 cr. (FY17), Rs. 3.94 cr. / Rs. 0.11 cr. (FY18) and Rs. 5.18 cr. / Rs. 0.24 cr. (FY19). For upto H1 FY20, company had posted net profit of Rs 0.06 cr. on a turnover of Rs. 2.29 cr. For the last three fiscals, TTL has posted an average EPS of Rs. 892.93 and an average RoNW of 44.16%. The issue is priced at a P/BV of 0.85 based on its NAV of Rs. 11.74 post issue.  If we annualise latest earnings of FY20 and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 83 and if we consider FY19 earnings, than its priced at P/E of 44. So issue looks fully priced. The comparison between peers is shown in above table. On BRLM's front, for Finshore Management Services Limited this is the 14th IPO and from last 10 IPOs, 3 opened below issue price and remaining opened around or above issue price with 0% to 25% premium on the day of listing. As of now, from last 10 IPOs, 4 are trading below issue price and remaining above or at par issue price. ( As on 23.01.20 ) Company has shown average results with RoNW 44.16% and issue is priced at P/E of around 44 as per FY19 earnings, which looks fully priced. Also the company is working in very competitive business segments and this industry growing at very good rate. The performance of BRLM is very poor, So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Bharat
• 2 Mrs. Kalavathy Bylappa