IPO Review,

One Point One Solutions Limited IPO
One Point One Solutions IPO comprises sale of 66.24 lakh equity shares, of which 18.82 lakh reserved for anchor investors. One Point One Solutions Ltd, Thane-based business process outsourcing (BPO) company, is the first company to rope in anchor investors and the company raised Rs 12 crore from anchor investors, ahead of its IPO.

One Point One Solutions Limited Details:
Issue Period 13-Dec-2017 to 15-Dec-2017
Issue Size Upto 66,24,000 Equity Shares (including Market Maker portion of 3,40,000 Equity Shares and anchor portion of 18,82,000 Equity Shares)
Issue Type 100% Book Building
Price Band Rs 65 to Rs 67
Face Value Rs 10
Market Lot 2,000 Equity Shares and in multiples thereof
Minimum Order Quantity 2,000 Equity Shares
Maximum Subscription Amount for Retail Investor Rs. 2,00,000
Book Running Lead Managers Pantomath Capital Advisors Limited
Categories FI, IC, MF, FII, OTH, CO, IND, and NOH
Name of the Registrar Link Intime India Private Limited
About One Point One Solutions Limited
  • Company’s Service offerings include:
    • BPO Services (Contact Center)
    • Technology Services (Knowledge Management)
    • Consulting Services.
  • Company’s service ranges from Data management and Business Analytics, Integrated Telephony Management, Customer Relationship Management, Sales Management, Document Management, Payment Gateway Management, Order Booking Management and IVR Solutions Management.
  • One Point One Solutions Limited is engaged in providing Business Process Management Services Company, offering services for Enrichment & Process Management Service, Skill Development, Training Program. The company is mainly engaged in outsourcing services which includes Inbound and Outbound Call, Back Office/Transaction Processing, Data Management services and Business Analytics. Our tailor made solutions offers customized engagement models to facilitate the ease of doing their business.
  • Customer services offered by the company include:
    – Customer Complaint resolution
    – B2B and B2C collection
    – HR support
    – Computer-aided telephonic interviews (CATI)
    – Technical & Specialty helpdesk
    –Sales (cross selling and up selling) & Loyalty program management
    – Customer-care analytics
    – Social-customer service
  • Akshay Chhabra and Tech Worldwide Support Private Limited are current promoters of  the  Company. having acquired it in 2015.
  • One Point One Solutions Limited has 5 location centres located between Mumbai, Gurgaon, Indore and Bangalore. The Company has 3301 employees as on July 31, 2017.
Financials:
(Rs. In Lakhs)
Particulars Q1FY18 2017 2016 2015
INCOME        
Revenue from operations 2562.53 9050.37 8417.2 6405.56
Other income 0.06 0.23 0.25 0
Total Income (A) 2,562.59 9,050.60 8,417.44 6,405.56
EXPENDITURE        
Employee benefit expenses 1,557.85 5,480.65 5,337.57 4,031.32
As a % of Total Revenue 60.79% 60.56% 63.43% 62.93%
Finance costs 64.74 214.19 145.33 9.75
As a % of Total Revenue 2.53% 2.37% 1.73% 0.15%
Depreciation and amortization expense 172.57 287.53 51.93 9.58
As a % of Total Revenue 6.73% 3.18% 0.62% 0.15%
Other expenses 590.3 2,377.44 2,385.40 2008.7
As a % of Total Revenue 23.04% 26.27% 28.34% 31.36%
Total Expenses (B) 2385.46 8359.81 7922.24 6059.36
As a % of Total Revenue 93.09% 92.37% 94.12% 94.60%
Profit before exceptional, extraordinary items and tax 177.13 690.79 495.21 346.2
As a % of Total Revenue 6.91% 7.63% 5.88% 5.40%
Exceptional items – – – –
Profit before tax 177.13 690.79 495.21 346.2
PBT Margin 6.91% 7.63% 5.88% 5.40%
Tax expense :        
(i) Current tax 36.11 140.84 100.97 107.26
(ii) Deferred tax 4.92 170.9 88.99 5.07
(iii) MAT Credit 17.53 -83.34 -26.13 –
Total Tax Expense 58.56 228.4 163.83 112.32
Profit for the year/ period 118.56 462.39 331.38 233.87
PAT Margin 4.63% 5.11% 3.94% 3.65%
Post Issue Equity 1672
IPO Price 67
Face Value 10
EPS (Post Issue)- FY17 2.77
PE 24.23
Market Cap 112.02  crore
Market cap/Sales 1.24
Objectives of the Issue
  • Repayment of Loan.
  • Funding the working capital requirements of the Company.
  • General Corporate Purpose.
Rationale for Investment
  • One Point One Solutions Limited  provides services to various industries such as Telecommunication, Banking & Financial Services, Insurance, Travel, E-commerce, Manufacturing etc. in areas shown below:One Point One Solutions Limited
  • Agreements with renowned brands: Company has partnered and entered into agreements with various reputed companies like Bharti Airtel Limited, Videocon d2h Limited, Baroda Pioneer Asset Management Company Limited, Dish Infra Services Pvt Ltd, LIC Mutual Fund Asset Management Limited, Shop CJ Network India Private Ltd, Wonderchef Home Appliances Private Limited.
  • Proficient management team: Company has performed well after management change.
  • Comprehensive range of services offered which address the varied and expanding requirements of its clients.
  • Has in place a customised IT infrastructure and management information systems with capability to handle voluminous transaction loads in terms of orders, customers and products. 
  • One Point One Solutions Limited intends to expand into other verticals like K.P.O (Knowledge process outsourcing), Pay roll processing, Creative and publishing technology outsourcing. and HRO (Human Resource Operation).
  • JBCG Advisory Services.picked up 77,000 shares of the company at Rs 65 per in Nov 2017
Risks & Concerns
  • High Client concentration: Top ten customers contributed 70.54% of its  total revenue. 
  • Industry is highly manpower intensive and One Point One Solutions Limited success depends to a significant extent on its ability to attract, hire, train and retain qualified employees,
  • Considerable dilution of equity on account of Bonus shares & IPO
Comparison with Peers
Rs. In Crore
Particulars(FY17) One Point  Allsec First Source Datamatics
Revenue 90.50 322.8 940.07 867.12
Net Profit 4.62 61.45 279.24 61.8
Equity 16.72 15.24 681.31 29.48
FV 10 10 10 5
CMP 67 438 40.05 128.1
EPS 2.77 40.32 4.10 10.48
PE 24.23 10.86 9.77 12.22
Market Cap 112.02 667.51 2728.65 755.28
Market Cap/Sales 1.24 2.07 2.90 0.87
The issue appears to be priced high compared to peers

Assessment

  • India is the world’s largest sourcing destination, accounting for approximately 55 per cent of the US$ 146 billion market. 
  • HSBC Midcap Equity Fund and Yes Bank Ltd have subscribed as the anchor investors to One Point One Solutions IPO.
  • Jaspal Bindra (JBCG Advisory services private limited) have purchased 77K shares @ Rs 65 in the month of November 2017. One Point One Solutions IPO is  now offering shares in the band of Rs. 65-67 which is almost the same price. Bindra is a former Asia Chief of Standard Chartered Bank.
  • One Point One Solutions Limited issued bonus shares in the ratio of 9 shares for every 1 share held in August 2017. This has ballooned its equity.Post IPO  its current paid up equity capital of Rs. 10.09 crore will stand enhanced to Rs. 16.72 crore and as shown in peer comparison other peers are placed better.
  • Given good business line of company, business could grow fast & in general good listing of many SME stocks, investors willing to take risk may opt for the issue. Iam not yet decided to put application in One Point One Solutions Limited IPO primarily on valuation concerns though otherwise company looks promising. May decide at last minute to put 1-2 applications.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk.

2 thoughts on “One Point One Solutions Limited IPO Review (NSE SME)”

  1. dear sir,

    many thanks for your services. i would like to know the details of the following IPOS:

    Apollo Micro Systems, Newgen Software Technologies, Amber Enterprises 

    Looking for your early reply and wishing you a very happy new year.

    thanks,

    Reply

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