TAC Security is a provider of vulnerability assessment and management platform,  cybersecurity quantification and penetration testing to enterprises. The IPO will comprise a fresh issue of 28,29,600 equity shares and it intends to raise ₹29.99 Cr.

About TAC Infosec:

• Company was originally incorporated in 2013.
• Company is engaged in the business of providing risk-based vulnerability management and assessment solutions, cybersecurity quantification and services of Penetration testing to organizations of any scale, size, and business through “SaaS model”.
• Company offers security software products and solutions both in India and internationally.
• Their end customers are Banks and financial Institutions, government regulatory bodies and departments, large-scale enterprises (including business offices)
• Their flagship software product is ESOF (Enterprise Security in One Framework) which was launched in 2018. ESOF is a vulnerability management platform consisting of various product portfolio namely ESOF Appsec, ESOF VMP, ESOF VACA, ESOF PCI ASV, ESOF CRQ. All the products launched under ESOF Platform have wide range of applications ranging from vulnerability management solutions for web and application-based data, compliance assessment, and cyber risk quantification.
• Promoters of Company are Mr. Trishneet Arora and Mr. Charanjit Singh.

Financials: TAC Infosec

Anchors: TAC Infosec IPO

TAC Infosec IPO: Salient Points

•  There is importance of cybersecurity in an increasingly interconnected world. Great emphasis is being put on safeguarding sensitive information, protecting critical infrastructure, and building a resilient cybersecurity ecosystem. 
• At present they provide solutions to clients under ESOF solutions having various sub-solutions encompassing on vulnerability management, cyber risk quantification and continuous assessment of client’s system in accordance with the need of clients. At present, they have 5 (Five) products under ESOF and further are planning to continuously add new products through R&D. They aim to soon launch ESOF Ensure which deals with Risk Rating & Cyber Insurance Solutions.
• It plans to use the net proceeds from the IPO to invest in human resources and product development to support organic growth in India.
• The Net Proceeds are proposed to be utilized in the manner set forth below for the objectives of the IPO:

• TAC Infosec earns most of the revenue from the global markets.
• Revenue wise Bifurcation

• Peers : Company has shown Dev Info, Infobeans Techno, and Sigma Solve as listed peers. They are trading at a P/E of 26.4, 51.5, and 24.1. They cannot be compared in the true sense.
• Clients: Their end customers are Banks and financial Institutions, government regulatory bodies and departments, large-scale enterprises (including business offices) like HDFC, Bandhan Bank, BSE, National Payments Corporation of India, DSP investment Managers Private Limited, Motilal Oswal Financial Services Limited and NSDL e-Governance.
• In 2022, TAC Security and Protean InfoSec Services Limited (Subsidiary of Protean eGov) joined hands to offer Full-Cycle Vulnerability Management Detection and Response solutions to the industry.
• Founder and CEO Arora is the largest shareholder in the startup with a 74% stake, Ace investor Vijay Kedia has a 15% stake. Ankit Vijay Kedia, Charanjit Singh and Subinder Jeet Singh Khurana hold 5%, 4% and 2% stakes, respectively.
• They have grown consistently over the last few years and for the three financial years ended 2023, 2022 and 2021, total revenue, EBITDA and restated profit for the year grew at a CAGR of 40.81%, 159.46% and 186.74%, respectively.
• For Financial year 2023, they generated total revenue of ₹ 1,000.01 Lakhs, EBITDA of ₹ 528.18 Lakhs and profit for the year of ₹ 508.56 Lakhs.
• They achieved EBITDA Margins of 52.82%, 19.97% and 15.56% and restated profit for the year margins of 50.86%, 12.04% and 12.26% for financial years 2023, 2022 and 2021, respectively.
• TAC Infosec IPO is coming at a PE ratio of 22x (FY23 Earnings) and 28.5x (fy24 annualized earnings)
• I intend to apply in TAC Infosec IPO subject to availability of funds. Besides backing of ace investors, there is growing importance of cybersecurity in an increasingly interconnected world. Last year Granules India faced considerable losses due to a cyber security attack. There are many such cases.
• GMP as reported on social media has been Rs. 70-80.
• Beeline Capital Advisors Pvt Ltd is the Lead Manager to the issue. It has a fair to good record. Past issues handled by them include KP Green Engineering Limited, Pratham EPC Projects, V R Infraspace, Rudra Gas Enterprise Limited, Fonebox Retail Limited, Konstelec Engineers, Australian Premium Solar, Indifra Limited, Benchmark Computer Solutions, Sheetal Universal Limited, Rajgor Castor Derivatives, Arvind and Company Shipping Agencies, Karnika Industries Limited, Hi-Green Carbon Limited, Kody Technolab Limited, Chavda Infra Limited, Vinsys IT Services Limited,Ahasolar Technologies, Pentagon Rubber, Remus Pharmaceuticals, Sotac Pharmaceuticals, RBM Infracon Limited, Transvoy Logistics, Dev Labtech, Viviana Power Tech, Vital Chemtech, Aristo Bio-Tech and Lifescience, Viaz Tyres, Vertexplus Technologies etc.
• SME IPO are much more risky and volatile than mainboard IPOs.
• 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.