Tracxn Technologies IPO Underwrote 11% in First 3 Hours of Bidding Process

Driven by strong retail demand, Tracxn Technologies on Monday attracted 11% bids for its initial public offering (IPO) within the first three hours of the Day 1 bidding process.

The Flipkart founder-backed IPO received bids for 22,50,525 shares, or 10% of the total issuance size of 2,12,69,714 shares. The quota reserved for individual retail investors (RII) was subscribed at 57%. The quota for non-institutional investors has only been subscribed up to 2%.

The Rs 309 crore (OFS) sell offer, which is being sold in the 75-80 price range, will end on Wednesday, October 12. Last hearing, the IPO commanded a gray market premium of Rs 6 per share.

Ahead of its IPO, the company raised Rs 139.22 crore by allocating 17,402,494 shares to peg investors at Rs 80 apiece. The SFO is made up of 38,672,208 shares. Among the selling shareholders are founders Neha Singh and Abhishek Goyal. Flipkart founders Binny Bansal and Sachin Bansal and a few other investors are also among the selling shareholders.

The Bengaluru-based private market intelligence platform posted losses in FY22 and 21, but posted profits in the June quarter of FY23.

“The company posted a profit in the first quarter of FY23 (minor). With operating leverage, profitability should improve going forward,” ICICIdirect said. The brokerage said scale benefits in the future could be one of the medium to long-term growth levers. The brokerage has not rated the IPO.

Choice Broking said it was cautiously optimistic about the company’s efforts to reduce labor costs. He said the partial or full exit of private equity investors has raised concerns about potential long-term growth prospects.

“There is no comparable company in the listed space with operations similar to the company. In a higher price range, Tracxn requires an EV/Sales multiple of 12.3 times, which seems to be stretched for a loss-making operation,” Choice Broking said. .

The brokerage also appeared concerned about the high attrition rate in the information technology sector and recommended a “avoid” rating on the matter.

That said, Arihant Capital Markets finds the issue fairly priced at an FY22 price-to-sales ratio of 12.7x.

“The company is a leading global player, ranking among the top 5 in its segment. With cost arbitrage advantages, high operating leverage, a strong technology platform and comprehensive data coverage strengthening Tracxn’s position. It broke even and posted gains in the first quarter of FY23,” Arihant Capital Markets said. Brokerage Religare Securities, meanwhile, is “neutral” on the IPO. stock Exchange.

Comments are closed.