Vivo Collaboration Solutions coming with an IPO to raise upto Rs 4.39 crore

Vivo Collaboration Solutions

• Vivo Collaboration Solutions has come out with an initial public offering (IPO) of 5,36,000 Equity Shares of face value of Rs 10 each for cash at a fixed price of Rs 82 per equity share.
  
• The issue has opened on December 20, 2021 and will close on December 23, 2021.
  
• The shares will be listed on NSE Emerge Platform.
  
• The share is priced 8.20 times higher to its face value of Rs 10.
  
• Book running lead manager to the issue is Sarthi Capital Advisors.
  
• Compliance Officer for the issue is Reeta.
  

Profile of the company

The company offers comprehensive suite of telephony services, covering every voice-based solution that an enterprise needs. It delivers end-to-end Cloud Telephony solutions for Enterprises. Incorporated with the vision to redefine all voice-centric communication by enabling enterprises to break free from the legacy PSTN-based communication, Vivo takes IP voice applications to a whole new level.

Vivo converged platform is solid, scalable and yet simple - solid as it harnesses the robustness of TDM networks; scalable as it rides a ubiquitous MPLS cloud, and simple because it neatly integrates everything in the background. The platform exquisitely differentiates and stands out among other competing services on account of its top-driven tech DNA, which ensures that even the minutest of development aspects are addressed to perfection.

The company’s OPEX-based cloud platform caters to specific needs of its diverse customer base and its services are optimally calibrated to ensure zero communication loss and hence save precious management time. It unlocks a whole new world of high-definition conferencing and peer-to-peer voice features.

Proceed is being used for:

• Meeting the working capital requirements of the company.
  
• General corporate purpose.
  
• Meeting issue expenses.
  

Industry overview

In the past few decades the information technology industry has observed fast growth throughout the globe. Both the developed and the developing economies have shown technological advancement. India is the world's largest sourcing destination with largest qualified talent pool of technical graduates in the world. The country has the low-cost advantage, being 5-6 times inexpensive than the US. India is the second fastest digitising economy among 17 leading economies in the world. The IT & BPM industry’s revenue is estimated at $194 billion in FY21, an increase of 2.3% YoY. The domestic revenue of the IT industry is estimated at $45 billion and export revenue is estimated at $150 billion in FY21. According to Gartner estimates, IT spending in India is estimated to reach $93 billion in 2021 (7.3% YoY growth) and further increase to $98.5 billion in 2022. Indian software product industry is expected to reach $100 billion by 2025. Indian companies are focusing to invest internationally to expand global footprint and enhance their global delivery centres.

Cloud communication is an entirely new way to build, deploy, and scale enterprise communications systems. It includes, but is not limited to Voice over Internet Protocol or VoIP, Communication as a Service or CPaaS and Unified Communications or UC. It offers enterprises cost-effective communications solutions that combine voice, messaging and data communication services over networks of telecom operators or MNOs. The need for in-house software and hardware resources is replaced with internet-based servers and sites. With growing internet penetration, business models are evolving and cloud communication services are being used by enterprises for streamlining back-end operations as well as for engaging with customers, employees and other stakeholders. The growing adoption of new-age technologies such as Big Data, analytics, artificial intelligence (AI), and the Internet of Things (IoT), along with favourable government initiatives are propelling the growth of the Indian cloud infrastructure market. Government initiatives such as DigiLocker, MeghRaj, and Cloud vision for India 2022, among others, have supported the growth of the cloud infrastructure market and established India as a global hub for cloud computing, content delivery, and data communication services.

Pros and strengths

End-to-end cloud voice: As an end-to-end Cloud Telephony services provider, the company gives enterprises instant and seamless connectivity to all voice applications and networks, local or global.

One-window cloud access: Vivo is truly a simplified suite of voice services, with just one easy interface to everything-PBXs, Bulk Dialers, Conferencing, Global CUG, DID or Call Centers-in the cloud.

Extreme quality always: The company’s commitment to quality ensures that all voice traffic is always routed uncompressed, even though it’s fully encrypted, in an end-to-end manner.

Risks and concerns

May face risk from potential claims resulting from client’s misuse of platform: The act of the company’s clients may subject it to potential risks, including liabilities or claims relating to regulatory regime in the various geographics in which it operate. The scope and interpretation of the laws that are or may be applicable to the company are continuously evolving and developing. If it does not comply with these laws or regulations or if it becomes liable under these laws or regulations due to the failure of its clients to comply with these laws by obtaining proper consent, it could face claims which may adversely affect its business and results of operations. Further, it uses its communications platform to provide services and solutions to clients. Any misuse of its communications platform or interruptions or failures of its platform, due to terrorist activity or any other reason, and the resulting threat to national security or mass miscommunication, could have an adverse impact on its business, results of operations and financial condition.

Operate in highly evolving market: The markets in which the company operates are highly competitive and subject to frequent changes due to technological improvements and advancements, availability of new or alternative services and changing client preferences and demands, and can require significant investment in research and development by market participants. It expect competition to intensify further, as new entrants emerge in the industry due to the opportunities available and as existing competitors seek to expand their services. Consolidation among its competitors may also leave it at a competitive disadvantage. In addition, if it wishes to expand into international markets, it will increasingly compete with local and global service providers.

Deficiencies in or termination of services by third-party service providers: The company’s business depends on the capacity, reliability and security of infrastructure owned and managed by third party service providers. It does not have control over the operation, quality or maintenance of such infrastructure or whether such third party service providers will upgrade or improve their infrastructure, software, equipment and services. In such cases, it could require it or its clients to invest time and resources in updating or improving software, APIs, equipment or services, and may result in interruptions or delays in the provision of its services and solutions. Further, interruptions or failures of such networks, whether due to natural disaster, government policy, terrorist activity or any other reason, and the resulting reduction in transactions and communications processed by its communications platform for delivery via such networks, can have a significant impact on its revenue and could an adverse effect on its business, financial condition and results of operations.

Outlook

Vivo Collaboration Solutions offers a comprehensive suite of telephony services, covering voice-based solutions of enterprises. The company delivers end-to-end Cloud Telephony solutions. The company enables enterprises to break free from traditional PSTN-based communication and adopt IP voice applications. It provides a solid, scalable, yet simple converged platform for enterprise communication. Vivo uses robust TDM networks and MPLS cloud services for its solutions. The company's OPEX-based cloud platform caters to the specific needs of its diverse customer base. The company's services ensure zero communication loss and hence save precious management time. On the concern side, as a service provider, the company must adapt to regulatory changes applicable in various industries in which its clients operate, and it is thus exposed to risks arising from regulations that impact its clients. Besides, any disruption in basic infrastructure, including the supply of power, could negatively impact its ability to provide timely or adequate services to its clients. It rely on telecom connectivity and other infrastructure providers to maintain communications between its various facilities nationally.

The company is coming out with an IPO of 5,36,000 equity shares of Rs 10 each at a fixed price of Rs 82 per equity share to mobilize Rs 4.39 crore. On the performance front, total revenue increased by Rs 486.21 lakh and 48.50% from Rs 1002.57 lakh in the fiscal year ended March 31, 2020 to Rs 1488.78 lakh in the fiscal year ended March 31, 2021. Net Profit has increased by Rs 260.74 lakh and 449.09% from profit of Rs. 58.06 lakh in the fiscal year ended March 31, 2020 to profit of Rs 318.80 lakh in the fiscal year ended March 31, 2021. The company plans to grow its business primarily by increasing the number of customers, as increased customer relationships will add stability to its business. It seeks to build on existing relationships and also focus on bringing into its portfolio more customers. The company intends to improve operating efficiencies by achieving economy of scales to achieve cost reductions to have a competitive edge over the peers.