The company will be selling its shares in the range of Rs 75-80 apiece with a lot size of Rs 185 shares. The issue can be subscribed till Wednesday, October 12. There is no peer company in the listed space having operations similar to it.
Rajnath Yadav, Research Analyst, Choice Broking said that at a higher price band, Tracxn Technologies is demanding an EV/Sales multiple of 12.3x, which seems to be stretched for loss making operations.
“Considering the high attrition rate in the IT-enabled sector and already double digit attrition level of Tracxn, we are cautiously optimistic on the company’s efforts in bringing down the employee costs,” he said.
Partial or full exit by PE investors raises the concerns on the long term potential growth outlook, said the analyst from Choice broking in its IPO note, which has an avoid rating for the issue.
Tracxn Technologies aims to raise Rs 309.38 crore via its initial stake sale, which is entirely an offer for sale (OFS) of up to 3.86,72,208 equity shares with a face value of Re 1 each by the promoters and existing shareholders of the company.
The promoters – Neha Singh and Abhishek Goyal – along with Flipkart founders Binny Bansal and Sachin Bansal are looking to offload shares in OFS along with India IV, SCI Investments V, Kolluri Living Trust, Milliways Fund and others.
The company will not receive any proceeds from the issue and the entire sum will go to the selling shareholders. The company said that it intends to gain the benefits of listing the shares on the stock exchanges.
Nirvi Ashar, Research Analyst at
Broking has flagged the concerns such as competition intensity is high across industry and decline in revenue , if customers do not renew their subscription. However, she is neutral on the issue.
However, she added that asset light model and combination of technology with human analysts is able to process vast amounts of data. Diversified customer basis and significant cost advantage across the globe are big plus for the company.
Company’s revenue has grown at a CAGR of 30.4 per cent, she said. “Although the revenues have increased, EBITDA and PAT have been in negative for the past 2 years. Investors need to keep an eye on the financials for FY23.”
Founded in 2013, Tracxn Technologies provides market intelligence data for private companies. The company has an asset light business model and operates a Software as a Service (SaaS) based platform, Tracxn.
As of June 30, 2022, the platform had 3,271 users across 1,139 customer accounts in over 58 countries and its customers include several Fortune 500 companies and/or their affiliates, the company said in its DRHP.
For the fiscal year 2021, the company clocked a total revenue of Rs 55.74 crore, which was Rs 63.13 crore a year ago. The company reported a net loss of Rs 5.35 crore, which was significantly lower than a net loss of Rs 54.03 crore last year.
Arafat Saiyed, Senior research analyst
Securities said that Tracxn is one of the key players in providing intelligence data for private companies. It is backed by experienced promoters, management team and marquee investors.
The aggressively priced IPO hardly leaves anything meaningful on the table for the investors over a medium-term, he added, keeping the issue not rated by the brokerage house.
is the sole book running lead manager to the issue, whereas Link Intime India has been appointed as the registrar for the issue. Shares of the company will be listed at both BSE and NSE.
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