Tracxn Technologies incorporated on August 11, 2012, is among the leading global market intelligence providers for private company data and ranks among the Top-5 players globally in terms of the number of companies profiled offering data of private market companies across sectors and geographies. It provides Enterprise-grade Data Curation for high-paid professionals, deeper coverage of new-age companies, deeper sector coverage, richer company taxonomy, detailed competition set, financials, cap tables, and much more.

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The company tracks more than 1.80 million companies with approximately 1,200 companies added every day to its repository of companies. It also covers over 2,000 feeds along with 3.6 million (as of June 2022) news and event tracking and also generates more than 14,000 reports every year. As of June 30, 2022, It has offered 49,922 taxonomy nodes and mapped over 1.84 million entities across these nodes.

Promoters & Shareholding:

Neha Singh and Abhishek Goyal are the company promoters.

Pre Issue Share Holding 50.93%
Post Issue Share Holding 35.65%

Public Issue Details:

Offer for sale: OFS of approx. 38,672,208 equity shares at Rs. 1, aggregating up to Rs. 309.38 Cr.

Total IPO Size: Rs. 309.38 Cr.

Price band: Rs. 74 – Rs. 80.

Objective: To carry out the sale of shares and achieve the benefits of listing the equity shares on the Stock Exchanges.

Bid qty: minimum of 185 shares (1 lot) for Rs. 14,800 and maximum of 13 lots.

Offer period: 10th Oct 2022 – 12th Oct 2022.

Date of listing: 20th Oct 2022.

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Pros:

  • One of the leading providers of market intelligence data for private companies globally.
  • Since Tracxn operates from India, Remuneration in the services profession in India is almost 10 times lower than that of the US, which is highly advantageous.
  • Diverse, longstanding, and growing global customer base.
  • Scalable and secure technology platform conceptualized and developed in-house.
  • Professional and experienced management team.

Risks:

  • The market for private market data platforms is competitive and characterized by rapid changes in technology, customer requirements, and industry standards.
  • The business is susceptible to risks associated with international operations.
  • The company is exposed to foreign exchange fluctuation risks.
  • It uses open-source software, which could negatively affect our ability to offer our platform

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Subscribe or avoid?

Sectorial outlook – The global B2B information services market which was close to around USD 140 billion in 2020 is estimated to be a USD 190 billion market in 2025 growing at a compound annual growth rate of approximately 6.16%. In recent years, the trend of growth of information service providers offering services through a platform and having a subscription-based pricing model is gaining popularity. Many of these platform-based B2B information services providers are known to be concentrating mainly on tracking growing start-ups, funding, technology, and other similar associated parameters. The low-cost, high-value nature of this industry has drawn several companies to venture into this market. PE firms have been the backbone for the growth of private companies worldwide, especially for emerging startups. As the number of private companies is growing worldwide, the role of PE firms in guiding, supporting, and nurturing these private companies has been commendable. PE firms are growing more efficient than ever and they are employing technology, availing services from different B2B information service providers to build a strong portfolio of companies which is expected to have a positive impact on the company and its business.

The financials (revenue and net profit) are shown in the graph below

Valuation – In the last 3 years the company has been making losses and when we annualize FY22 Q1 EPS, the P/E is around 1000x for a share price of Rs.80. As per the company, there are no listed entities in India, the business portfolio of which is comparable with its business. The company’s revenue has been consistently growing in the past 3 yrs but the valuation seems very expensive at this point in time.

Recommendation – The Company is ranked among the Top 5 players globally in market intelligence data provider to private companies and it has great potential for the future but the question is whether it can improve its market share while still being profitable, After considering all the factors the listing currently seems expensive and we would recommend “Avoid” to this IPO for investors however it will be good to keep a track on the progress of this company to revisit and review the opportunity.

Disclaimer:

This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision.

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