The stock markets are abuzz with various IPOs and NFOs being launched and the latest to join this trend is Tracxn Technologies Limited IPO. This company is a Bengaluru-based startup and is backed by Flipkart founders, Mr. Sachin Bansal and Mr. Binny Bansal. The IPO is an Offer For Sale and the IPO size is approximately Rs. 309 crores. The IPO will open on 10th October 2022 and will close on 12th October 2022.
The details of this IPO and other relevant information about the company are mentioned hereunder to help investors determine whether this is a good investment opportunity.
Tracxn Technologies Limited IPO Objective
As the IPO is an Offer For Sale, The proceeds from the IPO will not be received by the company. These proceeds will be received by the promotors Neha Singh and Abhishek Goyal who are selling their stake worth Rs. 76.62 lakh each or 25.46% of the capital each. The other key shareholders who are selling their stake in the company include
- Elevation Capital selling a stake worth Rs. 1.03 crores (21.89% stake)
- Accel India IV Mauritius selling shares worth Rs. 40.2 lakhs (4.01% stake).
- Mr. Sachin Bansal and Mr. Binny Bansal will be selling equity shares worth Rs. 12.63 lakhs (1.26% stake respectively).
Besides the promotors and the key shareholders racing the benefits from the sale proceeds, the other objective of the company is to receive the listing benefits for the equity shares of the company
Read More: What is the importance of IPO Grading? What are the factors that affect ipo grading
About Tracxn Technologies Limited
Tracxn Technologies Limited is a market intelligence provider for private company data at not only national but international levels and was incorporated in 2012. Today the company ranks among the top 5 companies internationally in terms of the volume of data and the companies profiled by them. They offer data based on artificial intelligence and data technology for private companies by tracking startups, potential mergers and acquisitions, emerging innovative sectors, private companies, etc. The customer base of the company includes various entities like investment banks, private equity investors, government agencies, corporates, universities, etc.
IPO Details of Tracxn technologies
The key details of the IPO are tabled below.
- IPO Size
|IPO Opening Date||10th October 2022|
|IPO Closing Date||12th October 2022|
|Issue Type||Offer For Sale|
|Fave Value of shares||Re.1 per share|
|IPO Price Band||Rs.75 – Rs.80 per share|
|IPO Issue size||3,86,72,208 shares of Re.1 each|
|Fresh Issue size|
|Offer For Sale||3,86,72,208 shares of Re.1 each|
- IPO Dates
The IPO will be open for a brief period and the other important dates pertaining to the IPO are tabled below.
|Price Band Allottment||4th October 2022|
|Anchor Investors Allottment||7th October 2022|
|Opening date||10th October 2022|
|Closing Date||12th October 2022|
|Allotment date||17th October 2022|
|Refund Date||18th October 2022|
|Share Credit Date||19th October 2022|
|Listing Date||20th October 2022|
- IPO Lot Size
Unlike investing in individual shares in the open market, this IPO has predetermined lot sizes that can be bought by investors. There will be no sale of shares in fractions. The details of the lot sizes and the minimum amount of investment is tabled below.
|Minimum investment||1 lot|
|Shares in each lot||185 shares|
|Minimum amount of investment per lot||Rs. 14,800|
|Maximum permissible investment in Lots||13 lots|
|Maximum shares for investment||2405 shares|
|Maximum amount of investment permissible||Rs. 1,92,400|
- IPO Reservation
The Tracxn Technologies Limited IPO will be available for subscription for three categories of investors. The permissible limits for the maximum subscription in each are tabled below.
|Category of Investor||Reservation of the IPO applicable||Maximum shares for subscription||Amount of investment|
|QIB (Qualified Institutional Buyers)||75%||29,004,157||Rs.2,32,03,32,560|
|NII (Non-Institutional Bidders)||15%||58,00,831||Rs.46,40,66,400|
|RII (Retail Individual Investors)||10%||38,672,208||Rs.30,93,77,600|
Financials of the company
The core financials of the company are tabled below.
|Year||Revenue (Rs. In crores)||Expense (Rs. In crores)||Profit after tax (Rs. In crores)||Basic EPS||Diluted EPS|
Strengths of the company
The company has been a major player in data accumulation and evaluation on the global platform. The key strengths of the company that make it a good investment opportunity are highlighted below.
- Tracxn Technologies Limited is a global name in providing critical private market data and has a huge customer base that has been growing consistently.
- Another key advantage is the asset-light business model which operates on the ‘Software As a Service’ centric platform. The business model of the company is quite scalable and based on artificial intelligence as well as a secured technology that has been developed in-house.
- The asset-light business model along with the advantage of cost-effective operations based in India is a boost to the bottom line making the scalability feasible.
- Apart from the above advantages for a successful business, the key strengths also include a team of successful promotors Board of Directors and Senior Management Team that has been backed by Marque investors.
Risks of investment
Investing in stocks always comes with few inherent risks. However, to make a decision of investing in the Tracxn Technologies Limited IPO, investors need to understand the risks of an investment in detail. These risks include
- A strong customer base is the bread and butter for any flourishing business. Therefore, among the top risks for the company, the risk of losing its existing customer base and failing to attract new clients are quite grave for Tracxn Technologies Limited.
- The business of this company is heavily dependent on the revenues from subscriptions. Therefore, any loss of subscription will directly impact the bottom line of the company and thereby the interest of the shareholders.
- If the company is not able to deliver on maintaining accurate and reliable data which is concise as well, it could spell a reduction in the reputation of the company and a loss of customer base.
- The high attrition rate in the IT sector is another major risk faced by the company.
Should you apply for Tracxn Technologies Limited IPO?
Investing in IPOs is an excellent investment opportunity, especially for retail investors to be part of the success of a company. Tracxn Technologies Limited although one of the prominent names on the national and international platforms, has been posting losses consistently for the past 3 years. Moreover, the IPO is in the nature of an Offer For Sale which implies the release of a significant portion of the stake by the promotors.
At the current price band, the IPO seems to be a costly affair for retail investors. Therefore, it will ideal for investors to wait for the price to match the forces of demand and supply and be priced at more practical levels. Also, as the company is currently making losses, the demand for the stock in the open market may be impacted by the company’s financials. Hence, it would be wise for the investors to give this IPO a miss.
How to apply for Tracxn Technologies Limited IPO?
Investors can invest in this IPO through the Fisdom app.
A. The price band for the Tracxn Technologies IPO is Rs. 75 to Rs. 80 per share.
A. The shares of Tracxn Technologies Limited are available for subscription in the lot size of 185 shares for the IPO. The maximum available lots under the IPO are 13 lots (2405 shares).
A. The IPO size for Tracxn Technologies Limited is approximately Rs.309 crores
A. The entire IPO is an Offer For Sale and there is no fresh issue.
A. The objective of this IPO is to have the sale proceeds towards the promotors as well as gain the listening benefits for the company.
A. The shares of Tracxn Technologies Limited have not yet been traded on the grey market, hence, the Grey Market Premium (GMP) is nil.