Softtech Engineers IPO comprises of Initial Public Offer of Total 28,51,200 Equity Shares with Fresh Issue of upto 23,71,200 Equity Shares and an Offer for Sale of upto 4,80,000 Equity Shares (Includes Market Maker Reservation Portion of 1,44,000 Equity Shares).Founded in 1996 and headquartered in Pune, India, SoftTech Engineers Ltd (Previously known as SoftTech Engineers Pvt Ltd) is a leading software product company that started as an entrepreneurial venture in creating innovative software and intellectual property in the architecture, engineering and construction (AEC) domains.
Softtech Engineers IPO Details
| Issue Period | 27-Apr-2018 to 03-May-2018 |
| Issue Size | 28,51,200 Equity Shares comprising Fresh Issue of 23,71,200 Equity Shares and an OFS for 4,80,000 Equity Shares |
| Issue Type | 100 % Book Building |
| Issue Price | Rs 78 to Rs 80 |
| Face Value | Rs 10 |
| Market Lot | 1,600 equity shares |
| Book Running Lead Managers | Pantomath Capital Advisors Private Limited and Small Industries Development Bank of India (SIDBI) |
| Categories | FI, IC, MF, FII, OTH, CO, IND and NOH |
| Name of the Registrar | Link Intime India Private Limited |
About Softtech Engineers Ltd.
Softtech Engineers Ltd. is engaged in the business of providing software products to various governmental authorities and departments. It receives work orders on the basis of tenders issued by them. The company has been founded by Mr. Vijay Gupta
Founder, Chairman, & CEO who is an alumnus of IIT Mumbai and is a first generation entrepreneur. He had earlier worked with CAD/CAM divisions of Crompton Greaves and Godrej & Boyce and has over 17 years of experience in development of complex CAD/CAE/Project Management software. He has been the driving force behind building SoftTech Engineers Private Limited, a software product company of repute during the last 14 years. He has steered the company towards international, award-winning success by envisioning software solutions that enable complex processes in the AEC (Architecture-Engineering-Construction) industry into a matter of a few mouse clicks.
Softtech Engineers Ltd. : Financials
| Rs. In Lacs | |||||
| Particulars | 7m 31/10/17 | 2017 | 2016 | 2015 | 2014 |
| Total Revenue | 2,375.08 | 4,711.63 | 4,432.53 | 3,594.36 | 2,567.60 |
| Profit before tax | 368.26 | 850.38 | 549.75 | 348.51 | 355.33 |
| Profit after Tax | 259.77 | 616.72 | 380.89 | 212.29 | 254.14 |
| Equity Capital | 705.12 | 352.56 | 352.56 | 344.35 | 301.3 |
| NAV | 46.8 | ||||
| Face Value | 10 | ||||
| EPS | 3.68 | ||||
| Post Issue Equity | 942 | ||||
| IPO Price | 80 | ||||
| Price/Book Value | 1.71 | ||||
| EPS Post Issue ( Fy17 ) | 6.55 | ||||
| PE – (Fy 17 Earnings) | 12.22 | ||||
| CAGR Sales 3 Yrs | 22.43% | ||||
| CAGR Net Profit 3 Yrs | 34.38% | ||||
| Market Cap | 7536.00 | Lakhs | |||
| Market cap / Sales | 1.60 | ||||
Softtech Engineers IPO: Issue Objectives
- Product development & enhancement– INR6.62 crore
- Funding of the domestic and international product penetration and marketing – INR 5.98 crore
- Repayment/Pre-payment ofunsecured borrowings – INR 2.03 crore
- General corporate purposes – INR 4.33 crore
Softtech Engineers IPO: Salient Points:
- SoftTech Engineers Ltd has develped software products that empower private and government enterprises to plan, approve, procure, manage, and maintain a wide range of infrastructure assets.
- Softtech Engineers Ltd. received Venture capital funding round from Rajasthan Venture Capital Fund in the 2014 . The fund acquired 26.77% stake in the Company. The fund is making a part exit with a holding of 14.94% post IPO.
- Promoters stake in the company which stands at 56.92% at present shall come down to 42.6% after the IPO.
- On the Risk factors business of the company is working capital intensive and requires significant portion of working capital as working with Govt. bodies puts working capital under strain and realization takes many months.
- About 71% of company’s revenue comes from Government sector.
- Revenue CAGR for the past 3 years stood at 22%, with Net Profit CAGR higher at 35%. However the growth has been lower in the recent past.
- The stock is being offered at a PE of around 12 based on FYE 2017 earnings and on a fully diluted equity after the IPO. This is below industry average which can be considered as around 20. Softtech Engineers Ltd. is considering Ramco Systems, Ceinsys Tech., Cyber Tech and Newgen Soft as its listed peers. The issue pricing is reasonable in that sense. equity
- The seven month figures for current year in comparison to Fye17 figures look a tad lower but this could be due to the nature of company;s customers and substantial portion of business and turnover may be happening towards the end of the year. Hence FY17 figures are considered more authentic for valuation comparison.
- I intend to apply in Softtech Engineers IPO as the issue is reasonably priced and IT companies of of late have been gaining traction on the stock Exchanges.
- This is an SME issue that shall be listed on NSE Emerge platform and in long run all SME issues may not have good trading volumes.
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.