Tracxn Technologies IPO is Offer for sale of 386,72,208 equity shares of Re. 1 each with a price band of Rs. 75 – 80 per share. It mulls mobilizing Rs. 309.38 cr. at the upper band of the IPO price. Tracxn Technologies offers its customers, private company data for deal sourcing, identifying potential M&A targets, deal diligence, analysis, and tracking emerging themes across various industries and markets.
| Bidding date | 10th – 12th Oct 2022 |
| Issue Size (₹ Cr) | ₹ 290 – 309 Cr |
| Issue Size (Shares) | 3,86,72,208 |
| Face Value | 1 |
| Bid Lot shares | 185 and multuples |
| Price Band | 75 – 80 |
| Issue Structure : | |
| QIB | 75% |
| NIB | 15%, 5,800,831 shares |
| Retail | 35%, 3,867,220 shares, 175 Cr. |
| Appl. for 1x Retail | 0.15Lac |
About Tracxn Technologies Limited
- Tracxn Technologies Limited (“Tracxn”) was incorporated in 2012.
- Tracxn is an SaaS company. Its platform Tracxn serves customers globally.
- Tracxn is among the leading global market intelligence providers for private company data and rank among the Top-5 players globally in terms of number of companies profiled offering data of private market companies across sectors and geographies.
- Tracxn has scanned over 662 million web domains and profiled over 1.84 million entities across 2,003 feeds categorized across industries, sectors, sub-sectors, geographies, affiliations, and networks globally.
- Tracxn’s platform has 3,271 users from 1,139 customer accounts in over 58 countries. It offers use of its vast database as a service on payment of fees.
- 70%of the company’s revenues comes from overseas, while the remaining is from domestic.
Anchor Book: Tracxn Technologies IPO
Tracxn Technologies raised 139.22 crores from anchor investors. India Acorn Fund, BNP Paribas Arbitrage, Whiteoak Capital, Kotak Mutual Fund (MF), ICICI Prudential MF, Nippon India MF and Reliance General Insurance Company are among the anchor investors.
Tracxn Technologies IPO: Financials
| Particulars / (₹ Cr) | Q1FY23 | Q1FY22 | FY22 | FY21 | FY20 |
| Revenue from Operations | 18.4 | 14.97 | 63.45 | 43.78 | 37.33 |
| Revenue Growth (%) | 22.91% | – | 44.93% | 17.28% | – |
| EBITDA as stated | 0.19 | -1.15 | -6.41 | -17.06 | -22.45 |
| EBITDA Margin (%) | 1.01% | -7.65% | -10.10% | -38.97% | -60.12% |
| Profit Before Tax | 0.84 | -0.72 | -4.85 | -5.35 | -54.03 |
| Net Profit After Tax | 0.84 | -0.72 | -4.85 | -5.35 | -54.03 |
| Equity Share Capital | 10.03 | 0.11 | 10.03 | 0.11 | 0.11 |
| Net worth | 22.98 | 22.04 | 20.64 | 22.22 | -135.24 |
| RONW (%) | 3.64 | -3.27% | -23.49% | -24.06% | -39.95% |
| NAV (₹ ) | 2.29 | 2.25 | 2.06 | 2.28 | -13.87 |
| Post Issue share Cap | 10.03 | ||||
| FV in Rs. | 1 | ||||
| IPO price | 80 | ||||
| EPS post IPO FY23ann | 0.08 | ||||
| PE | 1000.0 | ||||
| Market Cap Rs. Cr. | 802 | ||||
| Market Cap/Sales | 12.65 |
Salient Points
- The offer comprises an offer for sale by selling shareholders Ms Neha Singh of up to 76,62,655 equity shares, aggregating Rs 61.3 crore, at upper price band, Mr Abhishek Goyal up to 76,62,655 equity shares, aggregating Rs 61.3 crore, at upper price band,
- Other sellers include Elevation Capital ~Rs 87.85 crore, Accel India IV(Mauritius) Limited ~Rs 32.14 crore, SCI Investments V Rs 17.45 crore, Binny Bansal Rs 10.1 crore, Sachin Bansal Rs 10.1 crore, others Rs 29.12 crore.
- Promoter Ms Neha Singh pre-issue shareholding of 25.5%, shall decrease to 17.8%.
- Mr Abhishek Goyal pre-issue shareholding of 25.5%, shall decrease to 17.8%.
Concerns
- Competition intensity is high across industry
- Some investors making complete exit
- Revenue may decline, if customers do not renew subscription
Tracxn Technologies IPO: Assessment
- Strategically located logistics and warehousing facilities backed by stringent inventory management.
- revenue has grown at a CAGR of 30.4%.
- Tracxn Techno operations have been supported by investments from angel investors. This include Ratan Tata, NRJN Family Trust, Neeraj Arora, Sachin Bansal, Binny Bansal, Amit Ranjan, Girish Mathrubootham, Anand Rajaraman, Amit Singhal and Ashish Gupta.
- Tracxn also received investments from Elevation Capital, Accel Partners, Sequoia Capital, Prime Venture Partners and KB Investments.
- Tracxn’s business is technology driven, asset light and scalable.
- On the other side, the company has been incurring losses in the last 3 years. it has given meagre profits in Q1FY23.
- The Tracxn Technologies IPO is to offer for sale by investors many of whom looks, want to exit.
- Nandan Nilekani Family Trust, Sachin and Binny Bansal (Flipkart founders) are fully exiting their small 0.6%, 1.2% and 1.2% holding respectively.
- More than half the OFS is by PE fund Elevation Capital which is halving its 20% stake. Accel and Sequoia are completely exiting their 4% and 2% stake.
- Low promoter holding post IPO. ( ~36%)
- In past Tracxn Techno has seen 40% attrition rate.
- Iam not likely to apply for Tracxn Technologies IPO as it looks aggressively priced and lacks visibility of profits.
- Dismal performance of some past IPOs from new age or startup technology companies also weigh on my mind.
Tracxn Technologies IPO: Apply or Not
Risk : Moderate
Expected Reward : Low Profit / Low to moderate loss
Listing Gains : Not sure
Hold for Medium/ Long Term: No view
Subscription : to be watched till Day 3
I am not likely to apply to Tracxn Technologies IPO. Will apply only if very good QIB traction on Day3.
Above are my views only. Please do your own diligence.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in 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. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.