R K Swamy Limited specializes in integrated marketing communications, customer data analysis, comprehensive market research, and syndicated studies. R K Swamy offers an array of solutions, including Marketing Automation Platforms, Media Planning Tools, Customer Relationship Management (“CRM”) Systems, Data Analytics Tools, AI and machine learning tools. The proposed issue of R K Swamy Ltd plans to raise Rs 423.56 crores. It is a combination of fresh issue of 60,06,944 shares (Rs. 173.0 crores) and an offer for sale of 87,00,000 shares (Rs 250.56 crores).
IPO opens
March 4, 2024
IPO Closes
Mar, 6, 2024
IPO Size (Rs.)
₹423.56 Cr
IPO Size (shares)
14,706,944 shares
Breakup
Fresh issue ₹173.00 Cr+OFS ₹250.56 Cr
Face Value:
₹ 5
IPO Price in Rs :
₹270 to ₹288 per share
Minimum Lot
50 Shares
Listing At
NSE, BSE
QIB
~75%
NII Quota
~15%
Retail Quota
~10%
Lead Manager
SBI Capital Markets, IIfl Securities and Motilal Oswal
Registrar
Kfin
About R K Swamy Limited:
R K Swamy brand was established by its founder,R K Swamy in 1973.
They are one of the leading integrated marketing service groups in India, offering a single-window solution for creative, media, data analytics and market research services. (
They offer comprehensive range of services in the following interrelated and complementary business segments: (i) Integrated Marketing Communications, (ii) Customer Data Analytics and MarTech; and (iii) Full-Service Market Research.
R K Swamy commenced a standalone customer data analytics business in 2008 through its subsidiary Hansa Customer Equity.
The Company provides Integrated Marketing Communications services, Hansa Customer Equity provides Customer Data Analytics and MarTech and Hansa Research provides Full-Service Market Research services.
R K Swamy offers an array of solutions, including Marketing Automation Platforms, Media Planning Tools, Customer Relationship Management (“CRM”) Systems,Data Analytics Tools, AI and machine learning tools.
Srinivasan K Swamy (Sundar Swamy) and Narasimhan Krishnaswamy (Shekar Swamy) are the promoters of the company. The promoters and promoter group currently hold a pre-issue shareholding stake of 83.03 per cent in the company.
Financials: R K Swamy IPO
Particulars / Rs. Cr.
2023(06)
2023(12)
2022(12)
2021(12)
Revenue from operations
141.10
292.61
234.41
173.55
Profit/(Loss) after tax
7.93
31.26
19.26
3.08
Equity Share capital
22.23
4.45
4.08
4.08
Net Worth
146.66
140.81
111.93
98.22
Diluted EPS* (₹)
1.78
7.03
4.33
0.69
Net Asset Value
32.99
31.67
25.18
22.09
Current borrowings (A)
50.99
4.34
28.06
44.56
Non-current borrowings (B)
0.06
0.17
0.67
1.12
Total borrowings (C=A + B)
51.05
4.51
28.73
45.68
Post issue Share Capital
25
FV
5.0
IPO price
288.0
EPS Fy23
6.2
PE Fy23
46.5
EPS Fy24 (annualized)
3.1
PE Fy24 (annualized)
91.6
Market cap in cr
1,453.2
Market cap / Sales
4.97
R K Swamy IPO: Anchors
R K Swamy IPO: Salient Points
Marketing services refers to a range of activities and strategies that are designed to promote a brand, product or the business. These may encompass various creative techniques to attract, engage and retain customers, ultimately driving sales and business growth. These services may be provided by in-house marketing teams or outsourced to specialised marketing and advertising agencies. Marketing services include a combination of traditional and digital marketing methods, depending on goals and target audience for the business. Traditional marketing methods include channels such as television, radio, print media, etc. which provide access to a broad audience whereas digital marketing tools include SEO, email marketing and social media advertising that leverages the power of internet and digital connectivity to reach more specific demographics.
They are ranked 8th in terms of estimated operating revenue among the integrated marketing communications services groups operating in India (Source: CRISIL Report).
In the fiscal year 2023, the company delivered over 818 innovative campaigns for its clients across various media platforms. It also managed a substantial volume of data, processing more than 97.69 terabytes, and conducted over 2.37 million consumer interviews through quantitative, qualitative, and telephone surveys.
Key Industries
The amount raised from the IPO is to be used for funding for setting up a digital video content production studio, financing the IT infrastructure development of company and its subsidiaries, and funding the setting up of new customer experience centres.
Peers
Company/ Rs. Cr
FV
CMP (Rs.)
Revenues
RONW %
PE
Mcap/Sales
RK Swamy
5
288
299.913
22.2
46.5
4.97
Affle
2
1,125.00
1488.28
16.73
58
9.32
Latent View
1
524.00
594.528
12.87
73.1
17.7
Vertoz Advertising Limited
10
880
83.762
10.77
87
8.67
Service offerings vs scale of operations overview of select entities as per CRISIL
The company clients are primarily engaged in the following industries – Banking, Financial Services and Insurance, Automotive, Fast-Moving Consumer Goods, Consumer Durables, Retail, E-Commerce. They also serve clients across the rural and social (IEC)/ advocacy and media & entertainment sector.
They have catered to over 4,000 client organizations over the years and have served over 475 clients in the Fiscal 2023 from 12 offices across 12 cities.
Their revenue grew at a CAGR of 29.92% from Rs 173.55 crore in FY2021 to Rs 292.61 crore in FY2023.
Its revenue from digital operations for the six-months ended September 30, 2023 and the fiscal years ended March 31, 2023, March 31, 2022 and March 31, 2021 was Rs. 113.20 crore, Rs. 228.61crore, Rs. 176.50 crore and Rs. 121.15 crore, respectively, which contributed to 80.22%, 78.13%, 75.30% and 69.81% respectively, of its revenue from operations.
R K SWAMY IPO is coming at a PE ratio of 46x(fy23 earnings) and 91x ( fy24 annualized earnings). As per management company’s business follows a seasonal pattern, with lower revenue recognition in the first half and it expects a surge in the second half of FY24. However still the performance in first half is not that impressive.
I intend to apply in R K SWAMY IPO subject to availability of funds. Company has a track record of 15 years in the Data Analytics and Marketing Technology segment and has experienced promoters and management. However their HY FY24 performance is a shade lower. Overall looks OK.
GMP as reported on social media has been Rs. 90
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
