EdServ IPO, The First Issue In Past Four Months, Scrape Through
The first IPO in four months IT solutions firm EdServ Softsystems has got a late burst of investor interest. The issue which was languishing with negligible applications on the first two days (Feb 5-6) has been subscribed fully two hours prior to closure. Keynote is the book running lead manager while Ashika is the co-BRLM.
The company had come up with an issue of 3.9 million shares with net issue to public of 3.7 million priced in the Rs 55-60/share range. The IPO was oversubscribed 1.3 times even as the issue had got a Grade 1 indicating 'poor fundamentals' by rating agency CARE. On the first two days it saw applications from just some retail investors.
Formerly known as Lambent Systems, the firm which focuses on IT learning placement solutions, had clocked revenues of Rs 4.34 crore adjusted net profit of Rs 1.82 crore for the six months period ending September 2008. As against this the firm had revenues of Rs 3.95 crore with adjusted net profit of Rs 2.53 crore for 2007-08.
EdServ, a seven year old firm operates under three business units: Elmaq (IT Training), Heads(Education cum placement business) and Lamben (Software Development). It is co-promoted by husband-wife duo S Giridharan and G Geeta who together own around 44% stake (pre IPO) which becomes 29.5% post issue.
The firm had also made a pre IPO placement to a group of HNIs and individual retail investors at a price of Rs 60 per share which was the upper price range of the book built issue. The single largest shareholder of EdServ is a NBFC called Kalpathi Investments which held 46% pre IPO which now becomes 31%. Formed in July 2007, Kalpathi is a privately held firm which clocked net loss of Rs 2.92 crore for 2007-08.
The last successful IPO to sail through was that of Alkali Metals (October 2008). Another proposed IPO of Gemini Engi-Fab which was also scheduled for the first week of February 2009 was cancelled.
The information in this article is submitted and completely owned by KPMG. In our view the long term India gr