Inspira Enterprise India IPO : 7 things to know about
Inspira Enterprise India Ltd, an IT solutions provider has already got the SEBI go ahead for its draft red herring prospects (DRHP) in the month of November 2021. The company had filed its DRHP with SEBI in August last year and SEBI had already approved the IPO within the normal 2-3 month time frame.
However, Inspira Enterprise India Ltd is yet to zero in on the right time to launch the IPO. For now, there is no decision on the timing of the IPO considering the tepidness in the IPO markets.
7 important things to know about the Inspira Enterprise India Ltd IPO
1) Inspira Enterprise India Ltd has filed for a Rs.800 crore IPO with SEBI which comprises of a fresh issue of Rs.300 crore and an offer for sale of OFS of Rs.500 crore. The IPO has already been approved by SEBI and only the launch date announcement is left.
While the fresh issue portion of the Inspira Enterprise India IPO will lead to expansion of capital base and dilution of EPS, the OFS portion will be capital and EPS neutral as it will only result in transfer of ownership. However, no fresh funds will come into the company via the OFS.
2) Out of the total issue of Rs.800 crore, let us look at the OFS portion first. The OFS will entail the sale of stocks worth Rs.500 crore by the core early investors and promoters of the company. The offloading of shares will be done entirely by the promoters and promoter related groups.
Among the major sellers in the OFS, Prakash Jain will offload shares worth Rs.131.08 crore, Manjula Jain Family Trust will offload shares worth Rs.91.77 crore while the Prakash Jain Family Trust will offload shares worth Rs.277.15 crore.
3) The Rs.300 crore fresh issue portion will be used for a combination of funding working capital needs, repayment or prepayment of debt as well as for general corporate purposes. The reduction of debt is likely to be value accretive for the stock.
Inspira Enterprise India Ltd will have to be cautious about the application of the funds as too much of funds applied to working capital and general corporate purposes is not a very productive idea. The fresh infusion of funds will increase the share capital of the company and therefore will be EPS dilutive.
4) Inspira Enterprise India Ltd is also likely to consider a pre-IPO placement of Rs.75 crore, which will enable the company to gauge the likely demand for the stock among investors. The pre-IPO placement of shares is normally done to institutional investors, HNIs and to family offices.
Unlike the traditional anchor placement, the pre-IPO placement of shares allows greater leeway in pricing the placement although the lock-in period is slightly longer than the anchor placement. The final size of the IPO will be proportionately reduced depending on the success of the pre-IPO placement and the amount raised via that route.
5) Over the year, Inspira Enterprise India Ltd has positioned itself as a company focussed on digital transformation and cyber security. A more comprehensive engagement like digital transformation allows Inspira Enterprise India Ltd to engage more frequently and more deeply with the clients, in the process improving the client value and also the ROI per customer.
6) In terms of past performance, if you just look at the business delivery, Inspira Enterprise India Ltd has executed large cybersecurity transformation projects for some of its leading clients. It has also implemented cyber transformation projects for a number of large institutions based out of India.
Inspira Enterprise India Ltd has a wide offering across verticals and this allows the company to offer a complete life cycle styled solution to the customer. The increased use of cloud, ecommerce etc, cybersecurity becomes important and creating a digital ecosystem with cyber security at the core is the theme of the future that Inspira Enterprise India Ltd is betting heavily on.
7) The IPO of Inspira Enterprise India Ltd will be lead managed by Axis Capital JM Financial, SBI Capital Markets, YES Securities and Nomura Financial Advisory and Securities. They will act as the book running lead managers or BRLMs to the issue.
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