Taksheel Solutions to list shares on October 19

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Taksheel Solutions to list shares on October 19

The company has fixed issue price at higher end Rs 150 of price band of Rs 130-150 a share.

Taksheel Solutions - IPO: priced at upper end Rs 150

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Taksheel Solutions - IPO: priced at upper end Rs 150

price band was Rs.130 to Rs.150

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IPO Grey Market Premium

Taksheel Solutions - IPO: Over subscribe 2.99x; QIB 0.24x, HNI 4.7x and Retail: 6.18x

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TAKSHEEL SOLUTIONS LIMITED

Total Issue Size	5500000
Total Bids Received	16430220
Total Bids Received at Cut-off Price	10710450
No. of times issue is subscribed	2.99

Sr.No.	Category	No.of shares offered/reserved	No. of shares bid for	No. of times of total meant for the category
1	Qualified Institutional Buyers (QIBs)	2750000	666675	0.24
1(a)	Foreign Institutional Investors (FIIs)		666675
1(b)	Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)		0
1(c)	Mutual Funds		0
1(d)	Others		0
2	Non Institutional Investors	825000	3873735	4.70
2(a)	Corporates		2015190
2(b)	Individuals (Other than RIIs)		1858545
2(c)	Others		0
3	Retail Individual Investors (RIIs)	1925000	11889810	6.18
3(a)	Cut Off		10710450
3(b)	Price Bids		1179360

Updated as on 04 Oct 2011 at 1730 hrs

Taksheel Solutions - IPO: Avoid:: Business Line,

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Investors can give the initial public offering of Taksheel Solutions, a software service player, a miss, given the relatively expensive nature of the offer and the challenges in its key business segments. Limited areas of operation, complete dependence on the US and client concentration are key risks that the company faces. At the upper end of the price band (Rs 130-150), the company would trade at a valuation multiple of 12 times its FY11 earnings on a post-offer diluted basis.

This is at a premium to mid-sized IT players with a stronger track record, such as Nucleus Software Exports and 3i Infotech, that are available at 3-8 times. The company has grown at a fairly strong pace. Over a four year period leading up to FY11, the revenues of Taksheel grew at a compounded annual rate of 87.7 per cent to Rs 147.3 crore, while net profits expanded at 36.6 per cent to Rs 27.4 crore. But much of this has been achieved in 2010-11 when the company nearly tripled its revenues and more than tripled its profits. The company attributes this to fresh addition of clients.

BUSINESS CONSTRAINTS

Taksheel focuses on delivering services to clients, mostly financial institutions that are into wealth management solutions. This segment contributes over 70 per cent of the company's overall revenues. Not only does it present a concentration risk on a single vertical, there are other challenges as well.

There are several software companies in the mid-sized category that focus on the BFSI segment and grow at a steady clip. They do so by delivering services across retail and wholesale banking, capital markets, insurance, investment banking, and so on. But to focus on a niche area even within BFSI is a risk for Taksheel, especially given that all asset classes — equity, debt and gold — face challenging times. Given the cyclical nature of investments, wealth management business can swing in fortunes significantly, thus affecting the IT spends of clients significantly. The company also derives all its revenues from the US, an economy that faces severe debt and growth challenges. If proposals such as increasing taxes for the rich, who generally avail of wealth management solutions, go through, and the current volatile market conditions continue, clients would be faced with lower volumes. The top 10 clients of Taksheel account for over 80 per cent of its revenues which exposes it to the vagaries of any ramp down and pricing reductions to a significant extent.

The only other vertical that the company focuses on is telecom. This vertical has been in the doldrums for large and mid-sized software companies for the past couple of years. It is expected to turn around only after a couple of years, which means that this segment may not deliver significant revenue growth for the company.

With clients across-the-board engaging in vendor rationalisation, small players such as Taksheel may face find it difficult to compete with other entrenched players. The company has had negative cash flow from operations till FY10 as a result of high levels of sundry debtors and receivables and has only marginally positive cash flow in FY-11.

Taksheel Solutions IPO: Issue opens 29-Sep-11 (today) All you need to know

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TAKSHEEL SOLUTIONS LIMITED
	*Non-Retail investors i.e. QIB and Non-Institutional Investors Bidding for more than 2 lac shall mandatorily use ASBA facility
Symbol - Series	TAKSHIL EQ
Issue Period	Sep 29, 2011 to Oct 04, 2011
Post issue Modification Period	October 05,2011
Issue Size	Public issue of 55,00,000 Equity Shares of Rs. 10/- each
Issue Type	100% Book Building
Price Range	Rs.130 to Rs.150
Face Value	Rs.10/-
Tick Size	Re. 1/-
Market Lot	45 Equity Shares
Minimum Order Quantity	45 Equity Shares
IPO Grading	IPO GRADE 2
Rating Agency	CARE
Maximum Subscription Amount for Retail Investor	Rs.200000
IPO Market Timings	10.00 a.m. to 5.00 p.m.
Book Running Lead Manager	PNB Investment Services Limited
Syndicate Member	PNB Investment Services Limited, Reliance Securities Limited and Inventure Growth and Securities Limited
Categories*	FI,IC,MF,FII,OTH,CO,IND and NOH.
No. of Cities with Bidding Centers	47
Name of the registrar	Bigshare Services Private Limited,
Address of the registrar	E-2 and 3, Ansa Industrial Estate,Saki-Vihar Road, Sakinaka,Andheri(E), Mumbai - 400 072
Contact person name number and Email id	Mr. Babu Raphael,+91-22-404 30 200, tsl.ipo@bigshareonline.com
Prospectus	Click Here
Trading Member List	Click Here
Application Forms	Click Here
ASBA e-form link	e-Forms
Grading Report	Click Here
Branches of Self Certified Syndicate Banks (SCSBs) where syndicate / sub syndicate member to submit ASBA form	Click Here

Taksheel Solutions IPO: All you need to know: Issue opens 29-Sep-11 (today)

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Issue Terms
Issue price / Floor Price (Rs)	130-150
Application per share (Rs)	130.00
Minimum investment amount (Rs)	5,850.00
Minimum bid (no of shares)	45 shares and in multiples of 45 thereafter
Maximum Shares for Retail	1530-1305

Issue Date and Size
Issue opens	29-Sep-11
Issue closes	04-Oct-11
Listing on	BSE, NSE
Issue size (Rs cr)	71.5-82.5
Mkt cap at issue price (Rs cr)	284.08-327.78

Shares on Offer	Lakhs
Total shares offered	55.00
Of above, offered to public	55.00
Post-issue shares	218.52
Post-issue promoters' holding(%)	47.37

Lead Managers & Registrar
Lead Manager(1)	PNB Investment Services Ltd
E-mail	mb@pnbisl.com
Lead Manager(2)	N.A.
E-mail	N.A.
Registrar	Bigshare Services Pvt Ltd
E-mail	tsl.ipo@bigshareonline.com

Company Contact Details
Company's address	Lanco Hills Technology Park Private Limited (SEZ), Survey No. 201, Manikonda Village, Raje
Pincode	500089
Tel No.	91 40 40215915
Fax No.	91 40 40215916
Website	http://www.taksheel.com