Indian IPOs
>> Vishal Information Technologies
Vishal Information Technologies IPO Note
17 July 2008
Source: www.keynoteindia.net
Price Band: Rs. 140 - 150 per share
Issue open between: July 21 - July 24, 2008
Book Running Lead Managers: Keynote Corporate Services, IDBI Capital Market Services
To List on: NSE and BSE
Market Cap post-listing: Rs. 160 Cr. or $37 million (based on the cap price)
Executive Summary
- Vishal Information Technologies Ltd. (VITL) is a Chennai-based ITES company, promoted by established Tutis Technologies Ltd. The company provides services of data digitization, E-publishing, digital library, E-accounting and fund accounting. The company also specializes in the production of large print files specially aimed for the visually impaired.
- Indian exports of software and services valued at $31.4bn. It includes exports of BPO and IT enabled services of $8.4bn. In FY07, the ITES and BPO exports recorded a growth of 33.5%.
- NASSCOM expects the growth trajectory to continue, going forward. It estimates the segment to grow @ 32% in FY08.
- Globally, the size of digital publishing industry is estimated at $430bn. With growing usage of internet the data digitization and digital versions of books are becoming popular. In 2006, Microsoft and the British Library announced a partnership to digitize 25mn pages from 100,000 out-of-copyright books in the British Library’s collection. China also decided to supply e-reader to 165mn students in order to avoid all the physical costs associated with textbooks.
- Indian publishing industry which is worth of Rs80bn is growing @ 15% p.a. Due to its large pool of English knowing people, India became a big beneficiary of digitization outsourcing. Major international book and journal publishers which include Oxford, Cambridge University Press, Prentice Hall, Macmillan, Elsevier and Springer outsource a large chunk of business to India. This involves cost advantage of content transformation upto 40%.
- VITL has a strong track record of 14 years and well placed to tap the growing opportunities in data digitization, E-Publishing, Digital Liabrary space. In Financial terms, the company showed decent performance. Its revenue grew at a CAGR of 25.2% over FY05-08. VITL also maintained EBITDA margin in the range of 34%-37% for last 5 years in the competitive ITES and BPO industry.
- VITL’s subsidiary Basiz Fund Accounting Services Pvt. Ltd. (Basiz) provides services to Hedge funds, Mutual funds, Private Equity, Family offices, Insurance portfolios and managed accounts.
- VITL’s proposed plans involve expansion in Chennai facilities, new Assurance Center and Marketing office in Mumbai, and subsidiaries in the UK and USA. The whole expansion exercise is schedule to complete by March 2009. In March 2008, the company raised Rs3.72Cr from IDBI Capital Market Services Ltd. @ Rs120 per share.
- The IPO is priced at 12.6x based on pre-issue weighted average EPS and 11.1x based on FY08 pre-issue EPS.
To read more download full version of Vishal Information Technologies Hospital IPO Note.
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