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03 December 2023

Plada Infotech Services IPO: Orchestrating Growth in BPO Services

Introduction:

Plada Infotech Services IPO, a robust fixed-price issue of Rs 12.36 crores, unveils a promising narrative with 25.74 lakh fresh shares. The bidding spanned from September 29, 2023, to October 5, 2023, with the allotment finalized on October 9, 2023. The shares made their debut on NSE SME on October 13, 2023.

Pricing and Share Dynamics:

Priced at ₹48 per share, the IPO beckoned investors to participate with a minimum lot size of 3000 shares, necessitating a retail investment of ₹144,000. High Net Worth Individuals (HNIs) were required to invest a minimum of 2 lots (6,000 shares), totaling ₹288,000.

Market Performance Glimpse:

As of December 15, 2023, Plada Infotech Services Ltd (PLADAINFO) traded at ₹39.00, reflecting a moderate increase of 1.04%. The stock opened at ₹39.00, showcasing a range of ₹39.00 to ₹38.00. The previous close stood at ₹38.60, with a total traded value of 27,000. The chart trends over 7 days, 15 days, 1 month, 3 months, 6 months, 1 year, 18 months, and 2 years offer a comprehensive visual journey.

Key IPO Highlights:

The IPO, conducted from September 29, 2023, to October 5, 2023, presented a face value of ₹10 per share. The listing occurred on October 13, 2023, with a total issue size of 2,574,000 shares, aggregating up to ₹12.36 crores. This was exclusively a Fresh Issue, and the listing transpired on NSE SME.

Equity Transformation:

Pre-IPO, Plada Infotech Services Ltd held 6,000,000 shares, which increased to 8,574,000 post the IPO. The IPO included a market maker portion of 129,000 shares managed by Nikunj Stock Brokers.

Investor Allocation:

The IPO allocation was strategically distributed among various categories, with 2,574,000 shares on offer. This included 129,000 (5.01%) for Market Makers, 1,222,500 (47.49%) for Non-Institutional Investors (NIIs), and an equal percentage of 1,222,500 (47.49%) for Retail Individual Investors (RIIs).

IPO Timeline Unveiling:

The IPO timeline unfolded as follows:

- IPO Open Date: Friday, September 29, 2023
- IPO Close Date: Thursday, October 5, 2023
- Basis of Allotment: Monday, October 9, 2023
- Initiation of Refunds: Tuesday, October 10, 2023
- Credit of Shares to Demat: Wednesday, October 11, 2023
- Listing Date: Friday, October 13, 2023
- Cut-off time for UPI mandate confirmation: 5 PM on October 5, 2023

Lot Size Landscape

Investors could bid for a minimum of 3000 shares and in multiples thereof. The table below illustrates the investment parameters for retail investors and HNIs:

Application	Lots	Shares	Amount
Retail (Min)	1	3000	₹144,000
Retail (Max)	1	3000	₹144,000
HNI (Min)	2	6000	₹288,000

Promoter Holdings Transition:

Mr. Shailesh Kumar Damani and Mr. Anil Mahendra Kotak, the promoters, witnessed a shift in pre-issue promoter holding from 89.50% to 62.64% post the IPO.

Company Profile:

Incorporated in 2010, Plada Infotech Services Limited specializes in delivering tailor-made Business Process Outsourcing (BPO) services across India. The spectrum of services includes recruitment & payroll management, merchant acquisition, field support, software solutions, seller onboarding, and account management.

Financial Performance Overview:

As of March 31, 2023, Plada reported total assets of ₹2,811.09 lakhs, revenue of ₹6,275.12 lakhs, and a net profit of ₹233.82 lakhs. The financial indicators showcase a market cap of ₹41.16 crores, P/E (x) of 12.31, and a Debt/Equity ratio of 2.2. The Earnings Per Share (EPS) stands at ₹3.9, Return on Equity (ROE) at 37%, Return on Capital Employed (ROCE) at 21%, and Return on Net Worth (RoNW) at 31.07%.

IPO Utilization Plans:

The net proceeds from the IPO are designated for:

1. Meeting working capital requirements.
2. Procuring Laptops and Accessories for IT Development.
3. Repayment and/or prepayment of certain outstanding loans.
4. General corporate purposes.
5. Meeting issue-related expenses.

Expert Insights:

Suggests that the company, a bespoke BPO service provider with a Pan India presence, has shown growth in both top and bottom lines. However, based on FY23 earnings, the issue appears to be fully priced. Investors are advised to consider this for potential long-term rewards.

In Conclusion:

With a robust subscription rate of 57.85 times, Plada Infotech Services IPO reflects significant market enthusiasm. The company's presence across 12 cities and its comprehensive suite of BPO services position it well for growth. Investors, while recognizing the positive aspects, are encouraged to analyze the financial metrics and expert reviews for an informed investment decision. Seeking guidance from financial experts can provide valuable insights, aligning investments with individual financial objectives and risk appetites.

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