Tridhya Tech coming with an IPO to raise upto Rs 26.41 crore

Tridhya Tech

• Tridhya Tech is coming out with a 100% book building; initial public offering (IPO) of 62,88,000 shares of Rs 10 each in a price band Rs 35-42 per equity share.
• The issue will open for subscription on June 30, 2023 and will close on July 5, 2023.
• The shares will be listed on NSE Emerge.
• The face value of the share is Rs 10 and is priced 3.50 times of its face value on the lower side and 4.20 times on the higher side.
• Book running lead manager to the issue is Interactive Financial Services.
• Compliance Officer for the issue is Bhanvi Chaudhary.

Profile of the company

Currently, the company is engaged in full-service Software Development which includes all IT services and resources. The company provides turnkey consultancy services to various industries like e-commerce, Real estate, transport and Logistics, Insurance and other sectors. It provide services related to ecommerce development, Enterprise content Management, Bespoke Web Management, Mobile App, Development, API Development, Product Support & Maintenance, Front End Development and Graphic design.

The company provides customized software products, which starts from the initial concept of the product requirement, designing the architecture, coding and testing, deploying to the final deployment of the product. It also provides post deployment support on time to time basis to its clients. It also provides project management, consultation services, maintenance and support services to ensure the successful completion of the project and longevity of the software. This helps to ensure that the software is properly developed and deployed, meeting the expectations of the client. For providing best work/support to the company’s client, it recruits the experience professionals who must have good command over the programming languages, agile software development, user experience design, and other relevant technologies. As on January 31, 2023 the total employees strength is 162 including permanent and on call software professionals/technicians in the company.

Proceed is being used for:

• Repayment of unsecured and secured loans.
• General Corporate Purpose.
• Meeting Public Issue Expenses.

Industry overview

The Indian Information Technology/ Software industry is a global powerhouse today, and its impact on India has been incomparable. It has contributed immensely in positioning the country as a preferred investment destination amongst global investors and creating hug job opportunities in India, as well as in the USA, Europe and other parts of the world. In the last decade, the industry has grown many folds in revenue terms, and relative share to India’s GDP is around 7and 8 percent in FY2021-22. India is the topmost off-shoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The country's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be its Unique Selling Proposition (USP) in the global sourcing market. Indian IT/Software industry offers cost-effectiveness, great quality, high reliability, speedy deliveries and, above all, the use of state-of-the-art technologies globally.

The Indian IT/ ITeS industry has a leading position globally and has been progressively contributing to the growth of exports and creation of employment opportunities. India’s IT-BPM industry (excluding e-commerce) is expected to grew by 15.5% to reach at $227 billion, including exports of 178 USD Billion in FY2021-22 (E). The IT/Software industry has also created large employment opportunities and is estimated to employ 5.1 million professionals, an addition of 4,45,000 people over FY 2021-2022 (E). Women employees account for 36% (1.8 million) share in total industry employee base. The Ministry of Electronics and Information Technology is coordinating strategic activities, promoting skill development programmes, enhancing infrastructure capabilities and supporting R&D for India’s leadership position in IT and IT-enabled Services. 

Pros and strengths

End-to-end IT Services under a single umbrella: The company provides end to end IT - services to its customers that support their software applications and businesses throughout the full business life-cycle. At each stage of the business life-cycle, it offers services designed to address the customers’ specific needs as businesses move from different stages of maturity. These offerings are suitable for companies of all sizes. The company’s turnkey projects assignment provides completes solution of the customer needs and delivers complete satisfaction to the clients. One stop requirement of the client from its office enables it to grow its client relationships and scope of engagements.

Quality Service: The company has set very high standards for itself when it comes to timelines and quality of service It provides to its clients. The stringent systems ensure that all the services reach its client on stipulated time and there are minimum errors to ensure reduced product rejection. Its quality service has earned it a goodwill from its customers, which has resulted in customer retention and order repetition. It has also helped it to add to its existing customer base. It has developed internal procedure of checking the client orders at each stage from customer order to delivery. The company focuses on maintaining the level of consistently in its service, thereby building customer loyalty for its IT Services.

Experienced Promoter: The Promoter of the company has significant in depth knowledge of the IT Industry and has been instrumental in the consistent growth of the company’s performance. They have an overall experience of more than decade in the IT services. Its promoter’s experience and their understanding of the business will enable it to continue to take advantage of both current and future market opportunities. Its Board of Directors is supported by a team of well experienced and qualified personnel which directs the company in the pursuit of corporate excellence and technological innovation. Its Management experience, talent and vision helps it to obtain the goal of delivering superior customer value and enable to continue to take advantage of both current and future market opportunities. It is backed by industry experts who are well in their domain. Leveraging their experience, knowledge and industry insights, it delivers versatile solutions.

Risks and concerns

Face severe competition in business: There is a severe global competition in software based product markets. The company is also facing competition in technological upgradation in its products as it is extremely fast changing technologically. It expects competition to increase and intensify in the future as the pace of technological change and adaptation quickens and as more companies enter its markets. If, it is unable to introduce new competitive user-friendly products or services making its technology comparatively advanced, add new functionality to existing products and services, introduce cost effective products and after sales services, it may have to suffer loss of customer and market share of its products. Further, some of its competitors may possess greater resources than it, including greater revenues and financial and marketing resources, sizable offshore service, delivery capabilities, more experience with international operations or stronger brand recognition than it.

Dependent on developing and maintaining continuing relationships with clients: Generally, the company does not enter into long-term supply contracts with any of its customers, its business is dependent on developing and maintaining a cordial and cooperative relationship with its major customers. In the event of a decline in the demand for its products or services by its leading clients, its business, results of operations and financial condition may be adversely affected. There can be no assurance that it will get the continuous orders from its valuable clients in future and able to maintain existing business level. In such event, its business, profit and revenue will be adversely affected.

Product and services exposed to numerous risks: The company’s customers are also spread over the various overseas countries. As it continues to expand its business operations internationally, it is subject to compliance of numerous laws and regulations in these countries. The company also received revenue from operations from sales outside of India. Different countries may have their own set of Rules and regulations and Acts, Non-compliance with any of these regulations in the conduct of its business could result in termination of client contracts, fines, penalties, criminal actions against it or its officers, disgorgement of profits, prohibitions on doing business and may have an adverse impact on its reputation. Any lapse in compliance with these regulations in connection with the performance of its obligations to its clients could also result in exposure to monetary damages, fines and/or criminal prosecution, unfavourable publicity, restrictions on its ability to process information and allegations by its clients that it has have not performed its contractual obligations.

Outlook

Tridhya Tech provides software development services and solutions. Tridhya Tech provides IT consultancy services to industries like e-commerce, Real estate, Transport & Logistics, Insurance, and other sectors. The company also provides services related to e-commerce development, Enterprise Content Management, Bespoke Web Management, Mobile App, Development, API Development, Product Support & Maintenance, Front End Development, and Graphic design. The company provides customized software products, which start from the initial concept of the product requirement, designing the architecture, coding, and testing, deploying to the final deployment of the product. It also provides post-deployment support on time to time basis to its clients. The company also provides project management, consultation services, maintenance, and support services to ensure the successful completion of the project and the longevity of the software. On the concern side, the company is always subject to risks inherently associated with international operations, including risks associated with foreign currency exchange rate fluctuations, which may cause volatility in its reported income, and risks associated with the application and imposition of protective legislation and regulations relating to import or export or otherwise resulting from foreign policy or the variability of foreign economic conditions. 

The issue has been offered in a price band of Rs 35-42 per equity share. The aggregate size of the offer is Rs 22.00 crore to Rs 26.41 crore based on lower and upper price band respectively. On performance front, in FY 2021-22, the company’s total revenue was Rs 1354.47 lakh, which is increased by 62.43% in comparison to FY 2020-21 total Income of Rs 833.87 lakh. Profit after Tax (PAT) is Rs 322.60 lakh for FY 2021-22 as compared to Rs 85.89 lakh in FY 2020-21. Meanwhile, the company intends to build long-term sustainable business relationships with its clients to generate greater revenues. As part of the strategy, it plans to have an optimal client portfolio to better focus and serve its clients across the geographies and industries in which it does business. Its ability to establish and strengthen client relationships and expand the scope of services it offers to clients will help it grow its revenues and profits.