Xelpmoc Design and Tech IPO Review

Xelpmoc Design and Tech Limited Basic Details

 

Xelpmoc Design and Tech Limited Background

The company was originally incorporated in Bengaluru in 2015. Xelpmoc Design and Tech is engaged in the business of providing professional and technical consulting services, technology services and end-to-end technology solutions and support.

They cater to a wide range of clients that include entrepreneurs, start-ups, established and stable corporates engaged in e-commerce, transportation, financial services, social networking, etc. Their services include the development of mobile and web application, prototype and thematic product development and data science and analytics assistance.

The business is now coming up with an IPO in the next few days. In this detailed review of Xelpmoc Design and Tech IPO, we will talk about different aspects related to this IPO and hopefully, by the end of the review, you will be able to take a decision on whether to go ahead with this IPO or not.

Xelpmoc Design and Tech IPO Data Points

Xelpmoc Design and Tech IPO will open on (undisclosed) and close for subscription on (undisclosed).

The IPO size will be of (undisclosed) lakh Equity shares and the face value of each share will be ₹10. The price band has been set at ₹(undisclosed) per share. The offer price includes a premium of ₹(undisclosed) and is (undisclosed) times the face value of the equity shares. The IPO size is expected to be up to ₹230,000,000 or ₹23 Crore.

Out of the (undisclosed) lakh equity shares, (undisclosed) lakh equity shares, aggregating up to ₹(undisclosed) lakhs will be reserved for market makers and the rest (undisclosed) lakh equity shares, aggregating up to ₹(undisclosed) lakhs will be issued to the public.

Out of these (undisclosed) lakh shares, (undisclosed) lakh equity shares, aggregating up to ₹(undisclosed) lakhs will be allocated to retail investors for up to ₹(undisclosed) lakh.

The market lot size is of (undisclosed) equity shares and the shares will be listed on the National Stock Exchange and Bombay Stock Exchange (BSE).

Pursuant to a resolution passed on July 23, 2018, the issue has been authorised by the Board of Directors and pursuant to a special resolution of the shareholders on July 28, 2018, the offer has been approved by them.

Xelpmoc Design and Tech Limited Financial Performance (Restated Standalone)

The current financial health of the company does not seem so good in terms of profitability as it has been reporting losses for the last three years.

 

Also, the losses have been increasing from fiscal year ended March 31, 2016, to fiscal year ended March 31, 2018.

Although the total revenues of the company have been increasing during the same period. The return on net worth of the company for the years ended March 31, 2018, March 31, 2017, and March 31, 2016, is (21.69)%, (35.38)% and (114.84)% respectively.

Xelpmoc Design and Tech IPO Objectives

The main objectives of the Xelpmoc Design and Tech IPO are as follows:

• For buying IT hardware and network equipment for the enhancement of development centres located at Kolkata and Hyderabad
• For buying fit-outs for new development centres located at Kolkata and Hyderabad
• For funding of the working capital requirements of the company
• For meeting expenses related to the general corporate operations.

Other than the above-mentioned objectives, the company will also benefit in terms of enhanced corporate image, brand name and increased visibility through Xelpmoc Design and Tech IPO.

Xelpmoc Design and Tech IPO Events

Xelpmoc Design and Tech Limited filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on August 24, 2018, for the Book Built Issue. The offer will open on (undisclosed) and close on (undisclosed).

The finalisation of basis of allotment is expected to happen by (undisclosed) and the initiation of refunds is expected to start by (undisclosed). The transfer of shares to demat accounts is expected to start on (undisclosed) and the expected listing date will be (undisclosed).

Xelpmoc Design and Tech IPO Recommendation

Before deciding whether to invest in Xelpmoc Design and Tech IPO or not, let us first discuss various strengths and risks related to the business of the company.

Their biggest strength is their range of end-to-end technology-based products, services and solutions. They also focus on upgrading their services in order to meet customers’ specific demands.

Another competitive advantage the company enjoys is of accessibility to domain experts. The highly experienced management team of the company possesses the complete understanding of the business.

Also, the culture of the company provides opportunities for innovation, entrepreneurship and teamwork within the company. The organisation structure of the company is such that it enhances client service which helps in a better way of delivering services to them.

Business strategies related to enhancing technological capabilities and expansion to new geographical areas look promising.

Now, let us come to the risk factors related to the business of Xelpmoc Design and Tech Limited.

The company’s performance is dependent on the development of new services and products to meet the requirements of the changing needs of the clients. If the company fails to meet this requirement, it may affect the operations and financial health of the company.

Interruptions or problems with technology and related infrastructure may adversely affect the result of operations of the company.

The revenues of the company are exposed to the risk of fluctuations which may occur due to fluctuation in the length of the sales cycle.

Any breach of contracts signed between the company and its clients may adversely the business. Since the company was incorporated recently, sufficient financial history is not available to analyse about the future prospects of the company.

The company is also exposed to the risk of business volatility because of their work with the government departments and agencies. The company’s dependence on a few major clients also exposes it to the risk of  loss of revenues if one or some of them are lost.

The industry in which the company is operating is highly competitive and their pricing model needs changes in order to provide cost competitive products and services.

The company has been showing losses since inception and the trend of losses is growing every year. If this continues to be like this, it may significantly affect the financial health of the company.

Any increase in wages of their IT professionals may have a negative impact on profit margins and cash flows. The company is also exposed to credit risks relating to its customers.

The company has shown negative cash flows in the past and if it continues, it may have a negative effect on the profitability of the business as cash balances are required for meeting working capital requirements, implementing expansion plans, paying dividends, etc.

After analysing different aspects of the company, it can be said that investors must remain cautious and can avoid investing in Xelpmoc Design and Tech IPO.

In case you are looking to invest in this IPO, let us assist in taking the next steps forward. Just fill in some basic details in the form below and a callback will be arranged for you:

 

Xelpmoc Design and Tech Limited Management Information

Currently, there are 8 Directors on the Board of Xelpmoc Design and Tech Limited.

Tushar Trivedi is the Non – Executive Chairman and Independent Director of the company. He completed his M.Sc. from the University of Mumbai and also possesses a degree of Master of Administrative Management from the Narsee Monjee Institute of Management Studies, University of Mumbai.

He possesses an experience of more than 3 decades in digital and transactional banking, relationship management, business process transformation, business solutions and industrial manufacturing.

Xelpmoc Design and Tech IPO Advisors Information

ITI Capital Limited is acting as Book Running Lead Manager to the issue. Karvy Computershare Private Limited is acting as the Registrar for the Xelpmoc Design and Tech IPO.