Esconet Technologies Ltd IPO - Review, Valuation, Date & GMP

Esconet Technologies IPO  - Complete Overview

Esconet Technologies Limited, founded in 2012, specialises in high-end computing solutions, data center facilities, and cloud services. They offer a wide range of products and services tailored to client needs, including servers, workstations, storage solutions, virtualization software, and network security tools. 

Their subsidiary, ZeaCloud Services, provides cloud-based solutions such as disaster recovery, managed cloud services, and DaaS. With a prestigious clientele including the Ministry of Defence National Informatics Centre, Indian Institute of Technology, Bharat Electronics Limited, and many more.

Esconet demonstrates a commitment to excellence and innovation. Their introduction of Hexa-Data, focusing on advanced computing technologies like AI and ML, further solidifies their position in the industry. Leveraging AI and ML across various sectors, Esconet delivers scalable solutions and innovative data management techniques, ensuring their clients have access to cutting-edge technology and seamless IT infrastructure.

 

Some of their main products are:

(a) Supercomputers

(B) Servers

 

Esconet Technologies IPO Overview

Esconet Technologies IPO date is slated to be open for subscription from February 16, 2024, to February 20, 2024. This NSE SME IPO follows a Book Built Issue IPO.

Esconet Technologies IPO price is fixed at Rs. 80- Rs.84 per share. 

The total issue size of this IPO amounts to Rs.28.22 CR. The company has reserved 50% for institutional investors, 15% for non-institutional investors, and 35% for retail investors. 

 

Esconet Technologies IPO timetable (Tentative)

Events	Date
IPO Opening Date	16 February 2024
IPO Closing Date	20 February 2024
IPO Allotment Date	21 February 2024
Refund initiation	22 February 2024
IPO Listing Date	23 February 2024

 

 

Esconet Technologies IPO Details

IPO Opening & Closing Date	16 February to 20 February 2024
Face value	Rs.10 per share
Issue Price	Rs.80- Rs.84  per share
Lot Size	1600 Shares
Price of 1 lot	Rs.1,34,400
Total Issue Size	3,360,000 shares (aggregating up to Rs.28.22 Cr)
Fresh issue	3,360,000 shares (aggregating up to Rs.28.22 Cr)
Listing at	NSE SME
Issue Type	Book Built Issue IPO
Registrar	Skyline Financial Services Private Ltd

 

Esconet Technologies IPO Lot Details

Application	Lot	Shares	Amount
Minimum Lot Investment (Retail)	1 lot	1,600	Rs.1,34,400
Maximum Lot Investment (Retail)	1 lot	1,600	Rs.1,34,400
Minimum Lot Investment (HNI)	1 lot	3,200	Rs.2,68,800

 

Esconet Technologies IPO Reservation:

QIB Shares Offered	Maximum 50%
Retail Shares Offered	Minimum 35%
Other Shares Offered	Minimum 15%

 

Company Financial

Esconet Technologies saw significant increases in its financials from Sep 30 FY23 to Mar 31 FY23.

(Amount in Lakhs)

Period	Sep 30, FY 23	Mar 31, FY 23
Total Assets	4,260.46	2,798.37
Total Revenue	7,146.71	9,690.84
PAT	305.47	304.00
Net worth	902.97	554.47
Reserve & Surplus	825.19	477.48
Total Borrowings	1,008.95	1,103.89

 

Import Bifurcation Geographical-Wise

Esconet Technologies' import purchases as a percentage of total purchases decreased significantly from the previous fiscal year, while domestic purchases showed an increase.

(in % age)

Particulars	Mar 31, FY 23	Mar 31, FY 22	Mar 31, FY 21
Purchase Import	9.13%	14.67%	5.98%
Purchase Domestic	90.87%	85.33%	94.02%
Total	100.00%	100.00%	100.00%

 

Revenue Distribution Segment-Wise

Esconet Technologies' revenue from the government sector increased significantly in FY23 compared to FY22 and FY21.

(in % age)

Organisation	Mar 31, FY 23	Mar 31, FY 22	Mar 31, FY 21
Government	35.75%	20.58%	26.49%
Other than Government	64.25%	79.42%	73.51%
Total	100.00%	100.00%	100.00%

 

Revenue by Operations

Esconet Technologies' revenue from operations saw a significant increase from Sep 30, FY23 to Mar 31, FY23.

(Amount in Lakhs)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Revenue from operations	7,127.78	9,465.96	6,856.29
Other Income	5.12	31.58	3.08
Total Revenue	7,132.90	9,497.54	6,859.37

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• The working capital requirement of the company,

• Investment in Wholly Owned Subsidiary, viz. Zea Cloud Services Private Limited, to fund its capital expenditure expenses, and

• General Corporate Expenses.

 

Promoters and Management of Esconet Technologies IPO

1. Mr. Santosh Kumar Agrawal.

2. Mr. Sunil Kumar Agrawal 

Pre-issue Promoter Shareholding	89.18%
Post-issue Promoter Shareholding	64.94%

 

Esconet Technologies IPO Lead Managers

• Corporate Capital Ventures Pvt Ltd

 

 

Peers of Esconet Technologies IPO

Esconet Technologies IPO boasts strong fundamentals compared to its peers E2e Networks Limited and Netweb Technologies India Limited.

Name of the Company	Face Value (Rs. per share)	P/ E	EPS (Basic) (Rs.)
Esconet Technologies Limited	10.00	2.12	39.63
E2e Networks Limited	10.00	26.11	6.85
Netweb Technologies India Limited	2.00		9.22

 

Evaluation

The IPO is priced within the range of Rs. 80- Rs.84  per share.

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 39.63 from the last year, the resulting P/E ratio is 2.12x.

- Taking into account the weighted EPS of Rs 20.77 for the last three years, the P/E ratio amounts to 4.05x.

Comparative Analysis with Industry Average:

- The industry's average P/E is 36.9x.

As a result, the IPO price range, with a P/E ratio ranging from 2.12x to  4.05x, seems undervalued in comparison to the industry average of 36.9x.

.

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

- High-end clientele

- Experienced promoter and management team with a successful track record

- Long-term client relationships and diversified business

- Versatile, technically sound, and young operations team

- Well-versed and equipped with advanced technology

- Track record of growth and profitability

 

IPO's Weaknesses

- Their business heavily depends on technology; any system disruption could impact operations.

- Regulatory changes may affect national and international finance, impacting their business.

- Ensuring the retention of skilled personnel is crucial for them.

- Competitors' performance poses a risk to their market position.

- Economic policy changes in India could directly affect their operations.

- Volatility in capital markets presents risks to their financial stability.

 

 

IPO GMP Today

The Latest GMP of Esconet Technologies IPO is Rs.100.

 

Conclusion

Esconet Technologies Limited, a company specialising in high-end computing solutions and cloud services, is poised to enter the market with its IPO. With a strong foundation built on innovation, a prestigious clientele, and a commitment to excellence, Esconet presents an attractive opportunity for investors.

 

 The IPO, priced within the range of Rs. 80- Rs.84 per share, appears undervalued compared to industry averages, offering potential for growth. However, investors should carefully consider the risks associated with the company's heavy reliance on technology and market volatility. Overall, Esconet Technologies IPO presents an opportunity for investors seeking exposure to the burgeoning tech sector.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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