Veritas Advertising LTD IPO: Review, Valuation, Date & GMP

Veritas Advertising Limited IPO  - Complete Overview

Established in 2018, Veritas Advertising Limited is an integrated advertising agency offering 360-degree services across various platforms. 

The company distinguishes itself by owning advertising spaces in strategic locations such as West Bengal, Guwahati, and Shillong, positioning it among the select few agencies with media ownership in marketing and advertising.

Operating also in Delhi, Mumbai, and Pune, Veritas Advertising specializes in advertising through police booths and outdoor hoardings, providing integrated services. 

Their high-end ecosystem and end-to-end advertising solutions platform encompass Brand Strategy, Events, and Outdoor Media services, which include police booth hoardings, newspaper insertions, brochures, and outdoor hoardings display.

The company's offerings focus on:

(i) Establishing brand presence and educating customers

(ii) Enhancing brand reach and visibility

(iii) Creating strong recall and goodwill for brands

(iv) Engaging and interacting with targeted customers

(v) Increasing sales and boosting conversions.

Veritas Advertising has successfully executed projects in West Bengal, Meghalaya, Assam, Delhi, Jharkhand, Mumbai, and Pune, establishing a market presence in these states. 

The clientele of the company spanning in diverse industries such as electronics, automobile, FMCG, lifestyle, education, real estate, insurance, pharmaceuticals, and information technology.

Furthermore, Veritas Advertising has developed a robust sales network in West Bengal, Assam, and Delhi, with offices located in Kolkata, Guwahati, and Delhi. The company is planning for expansion into Mumbai aim to extend their reach to all major metro cities across India.

Veritas Advertising Limited IPO Overview:

Veritas Advertising Limited IPO date is slated to be open for subscription from May 13, 2024, to May 15, 2024. This is an NSE SME IPO and it follows a Book Built Issue.

Veritas Advertising Limited IPO price is fixed in the range of Rs.109 to Rs.114 per share. 

The total issue size of this IPO amounts to Rs.8.48 Cr. The company has allocated shares 35.14% to retail investors, 49.75% to institutional and 15.11% to non-institutional investors.

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, Veritas Advertising Limited has seen growth in total assets, net worth, and total revenue. The profit after tax and total borrowing has also grown.

Amount in Lakhs

Segment-wise Revenue Break up

(Amount in Lakhs)

State-wise Revenue Break up

(Amount in Lakhs)

 

The Objective of the Issue

The Company proposes to utilize the Net Proceeds to fulfill the following objectives:  

1. Funding the capital expenditure to set up new Police Booths in West Bengal, Assam, Maharashtra, and Delhi.

2. Funding the capital expenditure for Pole Kiosks to set up traffic signal point displays in Kolkata, Mumbai, and Pune.

3. General Corporate Purposes.  

Peers of Veritas Advertising Limited IPO

 

 

Evaluation

The IPO is priced within the range of Rs.109 to Rs.114 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 2.27 from the last year, the resulting P/E ratio is 50.22x.

• Taking into account the weighted EPS of Rs 1.52 for the last three years, the P/E ratio amounts to 75x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 18.07x.

As a result, the IPO price range, with a P/E ratio ranging from 50.22x to 75x, seems aggressively priced to the industry average of 18.07x.

Veritas Advertising Limited IPO Strengths 

• A comprehensive service portfolio providing effective solutions tailored to deliver results.

• Extensive geographical coverage.

• A broad customer base spanning multiple industries.

• A seasoned management team with a track record of successful project management and implementation.

• Robust infrastructure supporting innovative and high-quality solutions.

• Commitment to meeting client expectations and fostering long-term relationships.

• Prestigious clientele.

Veritas Advertising Limited IPO weaknesses 

• The Police Department issues approvals for the installation of Police Booths and Traffic Signal Posts, with a requirement for installation completion within one month of approval. Failure to meet this deadline renders the approval void, with no further approvals granted to the company.

• Any significant increase in ad space prices or unavailability of such spaces could harm the business. 

• The company heavily relies on police booth displays for advertising, so any interruption or unavailability of such spaces could negatively impact its operations.

• The company has experienced negative cash flows in recent years. 

• Failure to obtain, renew, or maintain necessary statutory and regulatory licenses, registrations, and approvals may significantly affect the business of company.

• A majority of the company's state-wise revenues over the past three years have been largely dependent on West Bengal. Any loss of business from this region could adversely affect the company's revenues and profitability.

• The company operate in a competitive environment and the inability to compete effectively may adversely affect the business..

Veritas Advertising Limited IPO GMP 

The Latest GMP of Veritas Advertising Limited is Rs 145.

Veritas Advertising Limited IPO timetable (Tentative)

Veritas Advertising Limited IPO is scheduled from May 13 to May 15, 2024, with allotment on May 16, refund initiation on May 17, and listing on May 21, 2024.

 

Veritas Advertising Limited IPO Details 

Veritas Advertising Limited IPO, with a face value of Rs.10 per share, opens on May 13 and closes on May 15, 2024, offering 744,000 shares at Rs.109 to Rs.114 per share, with a lot size of 1200 shares, aiming to raise Rs.8.48 Cr, and will be listed on NSE SME.

Veritas Advertising Limited IPO Lot Details 

For Veritas Advertising Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (1200 shares) at Rs.136,800 while for HNI investors, the minimum investment is 2 lots (2400 shares) at Rs.273,600.

Veritas Advertising Limited IPO Reservation

 

Promoters and Management of Veritas Advertising Limited

• Debojyoti Banerjee

• Sangita Debnath

• Mina Debnath.

 

Veritas Advertising Limited IPO Lead Managers:

• Horizon Management Private Limited

Dividend Policy

The Company has not declared any dividends during the past financial years.

Conclusion

The company operates in a competitive and fragmented sector. It has experienced negative cash flow in the past. Additionally, the sudden jump in the company's revenue and profit has raised concerns. The gestation period to migrate to the main board of the company also seems long. Investors, after evaluating all the factors, may apply in the upcoming IPO.

Disclaimer: This IPO Analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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