India’s first startup IPO
Desi startup Alphalogic Techsys became the first enterprise to float India’s first startup IPO, which would allow it to raise growth capital from a group of investors instead of select VCs. Markets regulator Sebi in February paved the way for a separate platform for startups to provide young companies easier access to capital and a way to bring in a new class of investors.
- The Pune-based boutique software consulting firm has fixed the issue price at Rs 84 per share and the minimum units one needs to buy is 1,600 shares, requiring a minimum investment of Rs 1,34,400. Overall, 7.36 lakh shares are on the block, worth Rs 6.18 crore.
- The company has interests across segments such as mobile app development, web application development, business intelligence and data analytics.
- In the past, it offered services to the US government, Merck India, Payback Card and several other companies across India, Australia, US and the UK.
- Its listed peers included Xelpmoc Design, which had a tepid listing in February this year. Info Beans Technologies and Industry Composite are two other listed entities that the company calls its peers.
- The pre-issue net worth of the IT company stood at Rs 2.22 crore as per restated balance sheet for FY19. The book value as per the restated balance sheet stood at Rs 162.95 for the year. Total debt stood at Rs 1.21 crore.
- The company’s net profit more than doubled in FY19, which helped it report 40 per cent compounded annual growth rate in last 4 years. The company lists Middle East, North Africa, Europe and Latin America as target geographies.
- An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance.
- Public share issuance allows a company to raise capital from public investors.
- The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes share premiums for current private investors. Meanwhile, it also allows public investors to participate in the offering.
- A company planning an IPO will typically select an underwriter or underwriters. They will also choose an exchange in which the shares will be issued and subsequently traded publicly.