Inspira Enterprise India Ltd IPO

Upcoming DRHP

IPO Synopsis

IPO Synopsis
Inspira Enterprise India Ltd has filed a draft paper with Securities Exchange Board of India to raise Rs. 800 crores via an initial public offering.
The IPO consists of a fresh issue of Rs. 300 crores and an offer for sale (OFS) of Rs. 500 crores by its existing shareholders and promoters.
The OFS comprises up to Rs. 131 crores by Prakash Jain, Rs. 91.70 crores by Manjula Jain Family Trust, Rs. 277.15 crores by Prakash Jain Family Trust.
Axis Capital, JM Financial, Nomura Financial Advisory and Securities India, SBI Capital Markets and Yes Securities India are the lead managers to the issue.

Objective of the Issue
The proceeds from the issue will be utilised for:
•    funding working capital requirements (worth Rs. 109.62 crores) 
•    repayment of debt (worth Rs. 115.37 crore)

About Inspira Enterprise India Ltd

The firm is a leading cybersecurity and digital transformation services company and has executed large cybersecurity transformation projects, infrastructure and digital transformation projects for various institutions in India as well as globally. It is present in six countries, including India, USA and across Southeast Asia, the Middle East and Africa.
Through its wide range of offerings across multiple verticals and geographies, the firm is capable of spanning the digital lifecycle of services ranging from consultation, architecture, solution design and implementation, to monitoring and providing managed services. In 2021, it had 235 active clients, of which it engaged with 69 clients in each of the last three fiscals.
The firm is one of the top three vendors for BFSI cyber security in India and has provided services to 9 out of the 10 largest private banks in, and to various public sector banks in India. Key clients include National Payments Corporation of India, Indian Bank and Canara Bank, among others. The firm leverages its relationships with prominent technology partners, including key technology suppliers such as Juniper, Fortinet, Palo Alto to provide a range of solutions
The business has three main verticals:
•    Cyber Security: It offers integrated portfolio of enterprise security services to deliver large-scale cyber security transformation projects, enabling clients to effectively manage risk and defend against emerging threats
•    Digital Solutions: It offers a converged architecture designed to create opportunities through disruptive digital technologies
•    Integrated Enterprise Solutions: Integrated enterprise solutions comprises the following: 
o    network engineering services that include network infrastructure solutions, 
o    infrastructure platform as a service involving traditional infrastructure solutions and hosted data centre solutions, and 
o    infrastructure management services that include a network operating centre and integrated operations centre for management of digital infrastructure
 

Peer Comparison

 

Name of the company

Total Revenue (in Rs. crores)

Basic EPS

NAV Rs. per share

PE

RoNW %

Inspira Enterprise

813.90

4.98

15.76

NA

31.63%

HCL Technologies Limited

76,306.00

41.07

220.78

25.56

18.60%

Happiest Minds Technologies Limited

797.70

11.75

38.51

124.34

29.76%

Birlasoft Limited

3,574.70

11.53

78.62

35.64

14.72%

Mindtree Limited

8,119.50

67.44

262.2

42.16

25.71%

Tech Mahindra Limited

38,642.20

50.64

284.51

25.2

17.81%

Wipro Limited

64,325.60

19.11

100.2

31.36

19.67%

Tata Consultancy Service Limited

1,67,311.00

86.71

233.66

38.17

37.52%

Larsen & Toubro Infotech Limited

12,644.20

43.19

417.93

4,762.55

26.54%

Coforge Limited

4,695.40

74.68

407

65.35

18.47%

Cyient Limited

4,272.30

33.08

268.77

29.25

12.30%

Zensar Technologies Limited

3,806.80

15.49

103.82

27.94

12.81%

 

Financials

Particulars (in Rs. Crores)

FY21

FY20

FY19

Revenue from contracts with customers

802.76

762.33

624.77

EBITDA

52.20

39.92

26.28

PAT

36.45

19.22

4.84

EPS (basic in Rs.)

4.98

2.72

0.59

ROE

31.63%

27.22%

8.03%

ROCE

50.80%

56.73%

49.96%

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Total Assets

673.66

646.10

492.45

Share Capital

6.04

6.04

6.04

Total Borrowings

63.81

49.35

29.06

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Net cash generated from / (used in) operating activities

-62.52

67.98

11.49

Net cash from / (used in) investing activities

-5.96

-0.95

-13.04

Net cash flow from / (used in) financing activities

2.94

6.89

-8.82

Net increase (decrease) in cash and cash equivalents

-65.54

73.92

-10.37


The Key points are- 

Key Points

  • Strengths

    1. Leading provider of cyber security in an industry with high entry barriers
    2. Digital transformation service provider with end-to-end capabilities across verticals
    3. Consulting led business and delivery model with an extensive footprint across India and internationally
    4. Global client base with longstanding relationships
    5. Diversified vertical-experience with a proven track record for BFSI solutions
    6. Value accretive solution designing on the back of well-established COEs
       
  • Risks

    1. A network or data security incident may allow unauthorized access to network or data, harm the reputation, create additional liability and adversely impact the business
    2. Failure to comply with the technical specifications prescribed under agreements with clients, may lead to loss of business, invocation of warranty and indemnity obligations
    3. Unsuccessful execution of business strategy to increase sales of their offerings to new and existing large enterprise clients leading to disruption in operations
    4. Strong competition from onshore and offshore IT services companies, and increased competition, firm’s inability to compete successfully against competitors, pricing pressures or loss of market share
    5. Sales cycles can be long and unpredictable, and sales efforts require considerable time and expense
    6. Additional risks associated with engaging with government institutions and public sector undertakings including delayed payments

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