Wherrelz IT Solutions Limited

Started in 2014, Wherrelz IT Solution Limited and its subsidiary Infinitybeam IOT Labs Private Limited is engaged in the business of web- centric, multi-spectrum IT Product development and maintenance and provision of IT Consultancy. It provides a wide range of services such as Enterprise Risk Management (ERM), Enterprise Resource Planning (ERP), E-Commerce, Application programming interface (API), Cyber security, Internet of Things (IoT), cloud based tools, etc through standard software development model or through customised software development model depending upon the requirement of the clients which is backed by advanced technology and efficient team of software developers who tend to keep themselves abreast by undergoing continuous R&D activity. Company's objective is to develop and maintain all in all software solutions to every enterprise in various sectors such as E- commerce, Education, Fintech, Healthcare, Social Networking, and other industries to enable ease of doing business. The Information Technology industry is a continuously evolving technological industry and they endeavour to exploit these technological advances to reach audiences in India and globally to provide growth, efficiency and advancement in the business objectives. On the financial performance front, WITS has posted turnover/net profits (loss) of Rs. 0.201 Cr. / 0.0124 Cr. (FY19), Rs. 0.221 Cr. / 0.0316 Cr. (FY20), Rs. 0.204 Cr. / 0.0144 Cr. (FY21) and Rs. 0.074 Cr / (0.153) Cr. (Q1FY22). So company has shown almost static results. For the last three years, company has posted average EPS of Rs. 2.47 and RoNW of 31.64%. The issue is priced at a P/BV of 3.09 based on its NAVs of Rs. 55.29 post issue. As per FY21 earnings, on fully diluted equity post issue, IPO is priced at P/E of around 462.65, and in Q1 FY22 company has posted losses, so IPO looks very aggressively priced. Comparison between listed peers in shown above table. On BRLM's front, Fedex Securities private limited associated with this SME IPO and handled 13 IPOs in last 3 years. From last 9 IPOs, one opened below issue price and remaining above issue price or at par. As of now from 9 IPOs, four are trading below and remaining is trading above issue price or at par. ( As on 14.12.21 ) For WITSL financials are average, RoNW is 20.59% and P/E is around 463 for FY21 earnings, so issue very aggressively priced. IT industry has very high growth potential, but lot of unorganised and organised players are available and make this sector very highly competitive. Performance of BRLM is average. So we give AVOID rating to this SME IPO.

• 1 Mr. Chaitanya Dhareshwar
• 2 Mrs. Sumanlata Dhareshwar