Excelsoft Technologies IPO: 43x Subscription Success
Excelsoft Technologies' initial public offering (IPO) has garnered significant attention in the Indian market, closing with an impressive subscription rate of over 43 times on the final day. This vertical SaaS company specializes in learning and assessment solutions, attracting ₹150 crore from anchor investors earlier in the week. The IPO is priced between ₹114 and ₹120 per share, valuing the company at approximately ₹1,380 crore at the upper end.
The offering includes a fresh issue of up to ₹180 crore and an offer for sale of up to ₹320 crore. Excelsoft plans to use the proceeds from the fresh issue for various purposes, including land acquisition and the construction of a new facility in Mysuru, upgrading existing electrical systems, and enhancing its IT infrastructure. The remaining funds will be allocated for general corporate purposes.
On the grey market, Excelsoft's IPO has a premium (GMP) of ₹14 today. Given the IPO price band, the estimated listing price could reach ₹134, indicating a potential gain of approximately 11.67% per share. This premium has fluctuated between ₹0.00 and ₹30.00 in recent days.
With over 20 years of experience, Excelsoft provides technology-driven learning solutions to a diverse global client base, which includes prominent names like Pearson Education and AQA Education. The company's robust offerings and near-zero leverage make it an attractive option for investors, although high client concentration poses risks, particularly given that a significant portion of revenue comes from a single major client.
Excelsoft's recent financial performance has been impressive, with revenue growth and a notable increase in profit after tax. However, the valuation appears aggressive, especially when compared to peers in the SaaS industry. Investors should weigh the company's growth prospects against the risks associated with client dependency and market competition.
The global assessment and proctoring market is projected to grow significantly, driven by advances in education technology and the rise of remote learning, which positions Excelsoft favorably in a rapidly evolving landscape. The establishment of a research lab in collaboration with IIT Ropar further underscores its commitment to innovation in EdTech, particularly with AI integrations.
In conclusion, while Excelsoft offers a compelling growth story within the SaaS sector, investors are advised to approach the IPO with caution, considering their risk tolerance and the company's valuation metrics.
