Flipkart founders-backed Tracxn Technologies on Tuesday garnered 39 per cent bids for its initial public offer on the second day of bidding process.
As of 1:03 pm, the initial share sale attracted bids for 82.07 lakh shares against an IPO size of 2.12 crore shares.
Retail individual investors’ portion was booked 1.96 times and non-institutional investors’ category was subscribed 11 per cent. Employee reserved and qualified institutional buyers’ category attracted no subscription so far.
The company has reserved 75 per cent of its offer for qualified buyers, 15 per cent for non-institutional investors and the remaining for retail investors.
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The Rs 309 crore offer for sale (OFS), which is being sold in 75-80 price band, would conclude on Wednesday.
Ahead of its IPO, the firm garnered Rs 139.22 crore by allocating 17,402,494 shares to anchor investors at Rs 80 a piece.
The OFS consists of 38,672,208 equity shares. Among selling shareholders are founders Neha Singh and Abhishek Goyal. Flipkart founders Binny Bansal and Sachin Bansal and a few other investors are also among selling shareholders.
The Bengaluru-based private market intelligence platform posted losses in financial year 2021-22 (FY22) and 2020-21 (FY21) but has reported profits in June quarter of 2022-23 (FY23).
Brokerage Swastika Investmart has ‘avoid’ rating for the IPO as the company “faces significant competition from private players.”
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“The company faces significant competition from private players such as Crunchbase, CBInsights, PrivCo & Pitchbook, and free online and offline sources of information on companies & businesses, including government records, company websites, and open online databases. We believe that the company will find it difficult to substantially grow its client base and top line in the coming years. Finally, the exorbitant valuation of Price to Sales of approximately 12.5 (Based on FY22 numbers and Upper band price) makes it very difficult to recommend this issue. Thus, we have assigned Avoid Rating for this issue,” the brokerage stated.
Choice Broking said it is cautiously optimistic on the company’s efforts in bringing down the employee costs. It said partial or full exit by PE investors has raised concerns on the long-term potential growth outlook.
“There is no peer company in the listed space having operations similar to the company. At higher price band, Tracxn is demanding an EV/Sales multiple of 12.3 times, which seems to be stretched for a loss-making operation,” Choice Broking said.
ICICIdirect said that the company’s profitability may improve going further. “The company reported a profit in Q1FY23 (minor). With operating leverage kicking in, profitability is likely to improve, going forward,” it said. However, the brokerage did not rate the IPO.
IIFL Securities is the book-running lead manager to the issue.
