Admin
10 October 2023

Kody Technolab IPO: Riding the Tech Wave

Introduction:

Kody Technolab Limited, established in 2017, is a rising star in the world of software development services in India. The company's recent venture into the Initial Public Offering (IPO) market is generating quite a buzz.

IPO Highlights:

Kody Technolab's IPO, worth Rs 27.52 crores, is exclusively a fresh issue of 17.2 lakh shares. The IPO subscription window opened on September 15, 2023, and closed on September 20, 2023, with allotment finalization on September 25, 2023. Shares of Kody Technolab were listed on NSE SME on September 27, 2023. The IPO price was fixed at ₹160 per share, with a minimum lot size of 800 shares, requiring a minimum investment of ₹128,000 for retail investors.

Key Market Players:

Beeline Capital Advisors Pvt Ltd served as the book running lead manager of the Kody Technolab IPO, while Kfin Technologies Limited acted as the registrar for the issue. The market maker for this IPO was Spread X Securities.

Stock Performance:

As of October 6, 2023, Kody Technolab Limited's stock was trading at ₹227.85, reflecting a slight 0.09% increase. The stock opened at ₹229.90, reached a high of ₹229.90, and dipped to a low of ₹216.30. The previous closing price stood at ₹227.65, with a total traded value of 1,32,800 shares.

Ownership Structure:

The pre-issue shareholding was at 4,653,780, and post-issue, it increased to 6,373,780 shares, reflecting the company's expansion.

Financial Insights:

As of March 31, 2023, Kody Technolab exhibited robust financials. The company's assets surged to ₹1,452.55 lakhs, accompanied by a significant revenue of ₹1,109.10 lakhs. This represented substantial growth compared to the previous years. While there were losses in prior years, the company displayed a profit after tax of ₹318.09 lakhs. The net worth improved to ₹469.35 lakhs, with reserves and surplus at ₹123.99 lakhs. The total borrowing stood at ₹746.79 lakhs.

Market Indicators:

Key performance indicators included a Market Capitalization of ₹101.98 crores, a Price-to-Earnings (P/E) ratio of 22.66, and a Return on Equity (ROE) of 176.59%.

Objectives of the Issue:

The net proceeds from the IPO were intended for various purposes, including:

1. Funding capital expenditure for establishing a development center at Gift City, Gandhinagar.
2. Meeting incremental working capital requirements.
3. Repayment or prepayment of certain borrowings.
4. General corporate purposes.
5. Covering issue expenses.

Expert Opinion:

Highlighted that Kody Technolab operates in a competitive and fragmented segment. Despite its impressive performance in FY23, concerns about sustainability and the pricing of the issue were raised. Investors are advised to proceed with caution.

Subscription Status:

The Kody Technolab IPO witnessed tremendous interest from investors, with an oversubscription rate of 51.55 times as of September 20, 2023. Retail investors showed strong enthusiasm with a subscription rate of 53.56 times, while the Non-Institutional Investors (NII) category subscribed at a rate of 41.17 times.

Conclusion:

Kody Technolab Limited's foray into the IPO market reflects its ambition and potential in the tech industry. Investors should carefully evaluate the company's financial performance, especially its sudden growth in recent years, and consider their investment goals before making a decision. As always, a diversified and well-informed investment strategy is essential in today's dynamic market.

Read More IPO related blogs - Kahan Packaging IPO