P.E. Analytics coming with an IPO to raise around Rs 31.60 crore

P.E. Analytics

• P.E. Analytics is coming out with a 100% book building; initial public offering (IPO) of 27,72,000 shares of Rs 10 each in a price band Rs 111-114 per equity share.
  
• The issue will open on March 22, 2022 and will close on March 25, 2022.
  
• The shares will be listed on NSE Emerge Platform. 
  
• The face value of the share is Rs 10 and is priced 11.10 times of its face value on the lower side and 11.40 times on the higher side.
  
• Book running lead manager to the issue is Sarthi Capital Advisors.
  
• Compliance Officer for the issue is Chetna.
  

Profile of the company

The company is engaged in providing proprietary Real Estate Business Intelligence and Analytics platform on B2B business model to various users such as Developers, construction industry, Investors, Banks, Housing finance companies, Equity research firms, real estate PE funds, REIT’s, financial institutions, Mortgage Insurers, HNIs, Lenders and Investors in real estate. Due to company’s in depth research, authentic data base and years of experience, unbiased and credible data, the company has quickly transformed itself into India’s most comprehensive Business Intelligence platform for real estate in India. The company provides authenticate real estate data, analytics and market research reports available on various formats and pricing on annual subscription basis and ad hoc reports as per requirement of users.

The company’s principal business lines are characterised by their market-leading positions, high barriers to entry, PAN India footprint and potential for long-term growth, in order to capitalize on the opportunities available to it and to drive long-term value. 

Proceed is being used for:

• Expenditure for technological upgradation.
  
• Retail initiative (B2C Expansion plan).
  
• General corporate purposes.
  
• Meeting issue expenses.
  

Industry Overview

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. Real estate sector in India is expected to reach $1 trillion by 2030. By 2025, it will contribute 13% to country’s GDP. Emergence of nuclear families, rapid urbanization and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial, and retail. Rapid urbanization in the country is pushing the growth of real estate >70-75% of India’s GDP will be contributed by urban areas by 2020. The institutional investments in the Indian real estate sector are expected to increase by 4% to reach Rs 36,500 crore ($5 billion) in 2021, driven by rising interest of investors towards capturing attractive valuations amid the pandemic.

Between January 2021 and September 2021, private equity investment inflows into the real estate sector in India stood at $3.3 billion. In the top seven cities, housing sales increased by 29% and new launches by 51% in the fourth quarter of FY21. Delhi-NCR, Mumbai, Bengaluru and Pune together accounted for 83% sales in the same quarter. The performance of micro-markets in the Delhi-NCR region, including Noida and Gurgaon, posted a double-digit expansion in property appreciation prices with 11% and 13%, respectively, growth. Share of the top listed developers in the Indian residential market is expected to increase to 29% in FY24, from 5% in FY21, driven by a strong pipeline for residential project launch. In 2021, working remotely is being adopted at a fast pace and demand for affordable houses with ticket size below Rs 40 -50 lakh is expected to rise in Tier 2 and 3 cities, leading to an increase in prices in those geographies. Developers are now focusing on affordable and mid-range categories to meet the huge demand.

Pros and strengths

High end technology: The company has heavily invested in technology and innovation over the years to build its data platform that can deliver the results with efficiency and accuracy. It strive to drive new technology breakthroughs, introduce technology into its product pipeline and leverage it to fuel growth for its businesses and help its customers to make informed decision.

Client engagement: With impressive track record of business acquisition & retention, revenue generation and growth they are especially skilled at building effective productive working relationships with clients, new market development, strategic sales and negotiation. They enhance the company's prospective process with thought leadership and demonstrate its core competence to the beneficiaries.

Market leadership: The company is a Real Estate Business Intelligence and Analytics platform that enjoys the leadership position in B2B market segment of real estate data analytics. This leadership is achieved through continuous efforts, unmatched data platform that is run on real time with accuracy, efficient talent pool and cutting edge technology.

Risks and concerns

Face intense and increasing competition for users: The company’s business faces intense and increasing competition for users, from both local and international competitors that seek to provide search services. There are generic Internet search services providers as well as a number of local search services providers that provide local information in India. Its present and future competitors may range from large and established companies to emerging start-ups. Its competitors may have one or more of the following advantages compared to it - greater financial and other resources, advanced technology, larger sales and marketing networks, greater knowledge of the target markets, more extensive research and development and technical capabilities, greater pricing flexibility, longer operating histories and/or strong branding and reputation. These advantages may assist them in attracting users and paid advertisers.

Rely on third-party data centers and cloud computing providers: The company currently serve its clients from third-party data centers and cloud computing providers located around the world. Some of these facilities may be located in areas prone to natural disasters and may experience events such as earthquakes, floods, fires, severe weather events, power loss, computer or telecommunication failures, service outages or losses, and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct or cyber security issues, human error, terrorism, improper operation, unauthorized entry and data loss. In the event of significant physical damage to one of these data centers, it may take a significant period of time to achieve full resumption of its services, and its disaster recovery planning may not account for all eventualities. It may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data centers that it use.

Dependent on number of key personnel: The company is highly dependent on its Promoter, senior management and other key personnel for formulating its business strategies, managing its business and developing and maintaining client relationships. The market for skilled personnel is extremely competitive, and the process of hiring employees with the necessary skills requires the diversion of significant time and resources. It incur costs related to attracting, relocating, and retaining qualified personnel in these highly competitive markets, including leasing real estate in prime areas in these locations. Further, many of the companies with which it compete for qualified personnel have greater resources than it has. It seeks to retain and motivate existing personnel through its compensation practices, company culture, and career development opportunities. If the company fails to attract new personnel or to retain its current personnel, or have to pay higher compensation to current and new employees, its business and operations could be harmed.

Outlook

P.E. Analytics offers Real-Estate Business Intelligence - Residential & Commercial, Research & Consulting, Collateral Risk Management, Advanced Processing Facility, Realty Indices, and Catchment Area Analysis services to various users like Developers, Construction industry, Investors, Banks, Housing finance companies, Equity research firms, real estate PE funds, REIT's, Financial institutions, Mortgage insurers, HNIs, Lenders, and Investors in real estate. Its proprietary database, covers pan India footprint across 44 cities, real estate data covering more than data 180 points over 13 years and over 156 month on month data base. It has coverage of over 42,000 developers, over 1,36,000 projects in India and over 97,000,000 units. It has hired, professionals especially from finance and Engineering and IT background to create a pool of talent than can serve its clientele with best practices and technology. On the concern side, the company’s profitability is significantly impacted by its utilisation levels of fixed-cost resources, including human resources as well as other resources such as office space, and its ability to increase its productivity levels. The company may in the future avail, unsecured loans which may be recalled by the lenders at any time. In the event that any lender seeks a repayment of any such loan, then company would need to find alternative sources of financing, which may not be available on commercially reasonable terms, or at all.

The issue has been offered in a price band of Rs 111-114 per equity share. The aggregate size of the offer is around Rs 30.77 crore to Rs 31.60 crore based on lower and upper price band respectively. On performance front, total revenue increased by Rs 251.44 lakh and 14.58% from Rs 1,724.36 lakh in the fiscal year ended March 31, 2020 to Rs 1,975.80 lakh in the fiscal year ended March 31, 2021. The revenue has increased due to increase in the sale of services. Net Profit has increased by Rs 575.16 lakh and 491.47% from profit of Rs 117.03 lakh in the fiscal year ended March 31, 2020 to profit of Rs 692.19 lakh in the fiscal year ended March 31, 2021. Net Profit has increased due to decrease in expenditures and improved margins. The company thrives to maintain the existing customer relationship by providing them with the quality services and technology backed platforms. Also, it seeks to bring in more clients on its portfolio to scale up the business and to create sustainable revenue model that will result in higher financial efficiency to its company. Technology up gradation is very crucial and keeps changing, it seeks to invest in technology and innovation so as to keep pace with the current and future requirement. This will improve the operational efficiency and provide better experience to the client.