Benchmark Computer Solutions comes up with IPO to raise Rs 12.24 crore

Benchmark Computer Solutions 

• Benchmark Computer Solutions has come out with an initial public offering (IPO) of 18,54,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 66 per equity share.
• The issue has opened for subscription on December 14, 2023 and will close on December 18, 2023.
• The shares will be listed on SME Platform of BSE.
• The share is priced 6.60 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Beeline Capital Advisors.
• Compliance Officer for the issue is Ritika Deepak Paneri. 

Profile of the company

Benchmark Computer Solutions is an IT infrastructure solutions and technology consultancy and software development company. The company provides end-to-end technology and technology related services including IT Infrastructure and Software Development Services. The company provides service models such as IaaS (Infrastructure as a Service) and SaaS (Software as a Service). The Service portfolio of the company comprises of IT Infrastructure solutions, Software and Web Based Application Development Services and Annual Maintenance Contract (AMC) and Facility Management Services (FMS). Using its extensive understanding of its customers' businesses and leveraging a combination of advanced technologies and expertise, company provides tailored solutions designed to deliver differentiated outcomes. The Company has deep domain knowledge across industry sectors and technology expertise across traditional and new age technologies.

Its IT infrastructure management and solutions services have impressive credentials. It has not only executed complex IT transformation projects and has also helped run efficient IT infrastructure solutions and services for enterprise customers. It has also have a proven track record of successful, high-complexity delivery, customer satisfaction, and innovative IT solutions. Its IT infrastructure and solutions management services offer the experience, talent and tools required to help create, run and manage next-generation IT infrastructure. Its solutions comprising workplace technologies aim at enhancing user satisfaction, freedom and productivity while optimizing the ROI in workplace technologies. End users can consequently look forward to increased automation and collaboration by adopting workplace technology services. Its managed IT workplace services ensure right-sized infrastructure and support.

Proceed is being used for:

• Capital expenditure
• Working capital requirement
• General corporate purpose

Industry overview

India’s IT industry is expected to contribute 10% to India’s GDP by 2025. The IT industry accounted for 7.4% of India’s GDP, as of FY22. As of FY22, the IT industry employs 0.5 crore people. As per a survey by Amazon Web Services (2021), India is expected to have nine times more digitally skilled workers by 2025. This indicates that a total of around 3.9 billion digital skill trainings are expected by 2025. As of 2021, digitally trained employees constitute 12% of the country's workforce. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth $88.94 billion between April 2000-June 2022. The sector ranked 2nd in FDI inflows as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT). 

The IT industry added 4.45 lakh new employees in FY22, bringing the total employment in the sector to 50 lakh employees. The IT-BPM services revenue reached $194 billion in FY21. By 2025–2026, India is expected to have 60-65 million jobs that require digital skills, according to a Ministry of Electronics & IT report titled ‘India's trillion-dollar digital opportunity.’ In November 2021, Mr. Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, lauded the Indian IT sector for excelling its competitive strength with zero government interference. He further added that service exports from India had the potential to reach $1 trillion by 2030.

In August 2022, the Indian Computer Emergency Response Team (CERT-In), in collaboration with the Cyber Security Agency of Singapore (CSA), successfully planned and carried out the ‘Synergy’ Cyber Security Exercise for 13 countries to build network resilience against ransomware attacks. In June 2022, STPI Director General Mr. Arvind Kumar stated that exports through STPI units have increased from Rs 17 crore in FY92 to Rs. 5.69 lakh crore in FY22. In April 2022, the Indian Computer Emergency Response Team (CERT-In) issued Directions to strengthen the cybersecurity in the country.

Pros and strengths

Ability to provide customized and integrated IT solutions: It is an integrated IT services provider engaged in IT Infrastructure Management, Technical Support Services Outsourcing, providing a wide range of IT solutions and services to a diverse client base. It has the ability to provide its B2B clients with a blend of optimal functionality, value of money, commitment and flexibility (coupled with onsite support across India). It provides a range of services throughout the life-cycle of a project. Its services include, among other things, the provision of hardware, software and managed services which enable it to closely work with its customers to understand their industry-specific business needs and develop customised and comprehensive IT solutions to address such needs in a cost-effective and timely manner.

Experienced promoter and management team: Its promoters have more than 40 years of combined experience in IT Infrastructure Industry. Its Promoter lead the company with his vision. Its management team includes young and experience professionals. The strength and entrepreneurial vision of its Promoter and management have been instrumental in driving steady growth of the company and implementing its strategies. 

Wide range of service portfolio: Benchmark Computer offers wide arrey of services to the clients. It strives to provide one roof solutions to any corporate, engaged with the company. It provides a comprehensive end to end solution by delivering robust and advanced IT Infrastructure solutions along with post sale Annual Maintenance Contract (AMC) and Facility Management Services (FMS). Its advanced IT development services offer a seamless project execution process and a successful IT strategy. It strives to provide Hardware solutions along with software solutions including Data centres, Storage, back up and Security solutions tailored to the need of customers.

Risks and concerns

Dependents on top 10 customers: Revenue from its top 10 customers constituted 70.87%, 80.05%, 66.85% and 67.66% of its revenue from operations for the year/period ended on September 30, 2023, March 31, 2023, March 31, 2022 and March 31, 2021 respectively. It does not have firm commitment supply agreements with most of its customers and other terms of its services and solutions. The loss of any significant client would have a material effect on its financial results.

Rely on information technology systems:  It relies on its information technology systems to provide the company with connectivity across its business functions through its software, hardware and network systems. Its business processes are information technology enabled and any failure in its information technology systems or loss of connectivity or any loss of data arising from such failure could disrupt its ability to track, record and analyses work in progress, monitor maintenance activities or share data with its network partners, process financial information, manage creditors/debtors or engage in normal business activities, which could have an adverse effect on its business and operations.

Working capital requirements: Its business requires significant working capital, part of which would be met through additional borrowings in the future. In many cases, significant amounts of working capital are required to finance the procurement of branded products before payments are received from customers. Its working capital requirements may increase, under certain conditions, where payment terms do not include advance payments or include delayed payments from customers.

Outlook

The company is an IT infrastructure solutions and technology consultancy and software development company. The company provides end-to-end technology and technology related services including IT Infrastructure and Software Development Services. The company provides service models such as IaaS and SaaS. On the concern side, it does not have firm commitment supply agreements with most of its customers and other terms of its services and solutions. The loss of any significant client would have a material effect on its financial results.

The company has come out with an IPO of 18,54,000 equity shares of Rs 10 each at a fixed price of Rs 66 per share to mobilize Rs 12.24 crore. On performance front, the total revenue from operations for the year ended on FY 2022-23 was Rs 31.95 crore as compared to Rs 18.64 crore during the FY 2021-22. Revenue from operations increased by 71.36% from previous year i.e. FY 2021-22. Profit after tax increased to Rs 2.03 crore in FY 2022-23 from Rs 0.83 crore in the FY 2021-22. Meanwhile, it intends to continue to enhance scale in existing services across high end and mid segment to capitalize on the opportunity to cater rising acceptance and demand. Its wide service portfolio provides its competitive edge over its competitors. In order to maintain its competitive edge, it will continues to keep providing quality services.