Vivo Collaboration Solutions Limited

Vivo Collaboration Solutions Limited, started in 2012 and based in Delhi, offers comprehensive suite of telephony services, covering every voice-based solution that an enterprise needs. They deliver end-to-end Cloud Telephony solutions for Enterprises. Incorporated with the vision to redefine all voice-centric communication by enabling enterprises to break free from the legacy PSTN-based communication, Vivo takes IP voice applications to a whole new level. Vivo converged platform is solid, scalable and yet simple - solid as it harnesses the robustness of TDM networks; scalable as it rides a ubiquitous MPLS cloud, and simple because it neatly integrates everything in the background. The platform exquisitely differentiates and stands out among other competing services on account of its top-driven tech DNA, which ensures that even the minutest of development aspects are addressed to perfection. A modern day technology which brings the gold from old and intelligence of the new. Cloud Telephony truly integrates the conventional telephony and online services to cater to the communication needs of a business.Since businesses are going global it’s important to bridge the geographical distance between them. Cloud Telephony scalable nature adapts easily to the size of a growing business, keeps teams connected and saves cost. As per financial performance, VCSL has posted total income/net profits of Rs 9.04 Cr / Rs 0.04 Cr (FY19), Rs 10.02 Cr / Rs 0.58 Cr (FY20), Rs 14.88 Cr / Rs 3.18 Cr (FY21) and Rs 3.67 Cr / Rs 1.11 Cr (Q1 FY22). So company has shown good results over last Couple of years, but this sudden jump in net profit raises some doubts. Company has posted an average EPS of Rs 16.53 and average RoNW of 61.46% for last three fiscals. Issue is priced at a P/B of 1.81 as per NAV of Rs 45.24 post issue. As Per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 5.18 and as per annualised FY22 earnings P/E is 3.72. As per RHP, Comparison between listed peers are shown in above table, but they can't be compared on apple to apple basis and also size of VCSL is very small compared to these peers. On BRLM's front, Sarthi Capital Advisors Private Limited is associated with this IPO, and have handled around 43 IPO in last three fiscals. From last 10 IPOs, three are opened below issue price and remaining are opened above issue on the day of listing. As of now, two are trading below issue price and remaining are trading above issue price. ( As on 16.12.21) As per financials, VCSL has good financials, RoNW is 67.53% and P/E is respectively 5 and 4 as per FY21 and annualised FY22 earnings, which looks very reasonably priced, but if same profit margins will continue in future or not, need to be watched closely. Cloud based services are gaining popularity and have good growth opportunities. Performance of BRLM is good. So, we are giving "SUBSCRIBE WITH CAUTION" rating to this IPO.

• 1 UC IT Managed Services Private Limited