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DELAPLEX LIMITED - IPO ANALYSIS
The ‘Delaplex Limited’ officially issued its Prospectus on 17th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which has started from January 24, 2024 and will close on 29th January, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.
INITIAL PUBLIC OFFERNING | DELAPLEX LIMITED
The ‘Delaplex Limited’ officially issued its Prospectus on 17th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which has started from January 24, 2024 and will close on 29th January, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.
ABOUT THE COMPANY
As per the details of the company present on its official website, the company was incorporated in the year 2004 as a private company with the name ‘Quality Management Concepts Private Limited’. Further in the year 2012 company changed its working under the name of ‘Q M Computech Private Limited’ and in 2019 under the name of ‘delaPlex Private Limited’. Subsequently, in the October 2023 the company decided to go public and changed its name to ‘delaplex Limited’.
BUSINESS OPERATIONS
DelaPlex Limited, a subsidiary of DelaPlex INC., is a top supplier of software development and technology solutions, with a focus on consulting. DelaPlex Limited, which specialises in boosting client firms' development and profits, has forged important alliances to provide innovative technological solutions all over the world. The company's main areas of expertise include data science, cloud services, supply chain consulting, and custom software development. DelaPlex Limited offers a wide range of solutions in the areas of artificial intelligence, cloud computing, DevOps, security, data analytics, and software-defined data centres. Serving channel partners as well as end customers, the firm develops cutting-edge solutions to tackle a broad range of IT problems.
Holding 51% of the company's shares, delaPlex INC., a U.S.-based corporation, is the primary owner of delaPlex Limited, a subsidiary. The company is committed to offering API-enabled apps and software development, enabling businesses to quickly create powerful technological solutions that are in line with their most important business requirements. Development Services, Supply Chain – COE, Cloud Services, and Data Science are among the services provided, demonstrating delaPlex Limited's adaptability and creativity as a force in the software development and technology industry.
INDUSTRY RESEARCH
One of the leading companies in the information technology (IT) sector is Delaplex Limited. Its core competencies include offering end-to-end solutions that include computers, telecom gear, and data management services. Serving a wide range of customers, the firm works in several sectors, such as computer networking, systems design services, and broadcasting. The IT industry is expanding at an exponential rate, and Delaplex Limited has carefully positioned itself to take advantage of these prospects. The organisation has embraced technologies like the Internet of Things (IoT), which has completely changed the way businesses function, by using the most recent technological advancements. Delaplex Limited empowers customers to take use of data-driven insights and the power of networked devices to boost productivity and efficiency by incorporating IoT capabilities into their products. Delaplex Limited distinguishes out for its dedication to quality and customer satisfaction in a market with fierce competition. The firm has developed a devoted clientele and made a name for itself in the IT industry as a reliable partner by concentrating on providing value-added solutions that are customised to match the specific requirements of each client. Delaplex Limited is at the forefront of innovation as the IT sector develops, continuously investigating new technologies and approaches to stay ahead of the curve. The organisation is well-positioned to take advantage of future development prospects and hold onto its leading position in the global IT industry thanks to a committed team of experts and a customer-centric attitude.
COMPETITION
Delaplex Limited competes in a highly competitive market where rivals, some more resource-rich than others, compete for market share. Even while variables like marketing, brand value, and service quality are important, dependability and the contributions made to business logic are frequently the deciding considerations. To outmanoeuvre competitors, Delaplex depends on its vast knowledge and impeccable dependability record, even when facing both organised and unorganised players.
In this fast-paced industry where end-to-end solutions are in high demand, Delaplex sets itself apart with an array of complete services that few rivals can match. The organisation effectively competes by prioritising customer relationships and offering greater value, all while maintaining a solid reputation and unwavering dedication to service quality.
BOARD OF DIRECTOR AND PROMOTERS OF THE COMPANY
The company’s management includes the following members-
01. Mr. Nitin Sachdeva as Chairman and Managing Director of the company.
02. Ms. Preeti N Sachdeva as Whole Time Director of the company.
03. Mr. Manish Iqbalchand Sachdeva acting as Non-Executive Director of the company.
04. Mr. Manish Tarachand Pande, Mr. Himanshu V Bajaj acting as Non-Executive Independent Directors of the company.
PROMOTER HOLDING
THE Promoters and Promoter group hold 73,10,000 Equity Shares, representing 100.00% of the pre-offered, subscribed and paid-up Equity Share capital of the Company. The holding can be analysed from the given chart.
KEY FINANCIAL DETAILS OF THE COMPANY
In the fiscal year 2022-23, the Company has achieved a noteworthy revenue from its operations of Rs. 5400.46 (in Lakhs), and generated a revenue of Rs. 2785.84 (in Lakhs) till 30th September, 2023. While securing a profit of Rs. 790.72 (in Lakhs) for the year 2022-23. For the period ending 31 March, 2022 the company has earned a profit of Rs. 611.87 (in Lakhs). And till 30 September, 2023 the company has earned a profit of Rs. 425.53 (in Lakhs).
To make a wise investment choice, we will delve into various financial ratios for a comprehensive assessment of the company's financial condition and performance.
|
RATIO NAME |
FY 2022-23 |
FY 2021-22 |
|
CURRENT RATIO |
23.49 |
22.15 |
|
RETURN ON EQUITY |
40.45% |
48.82% |
|
DEBT EQUITY RATIO |
NIL |
NIL |
|
NET PROFIT |
14.64% |
12.30% |
|
RETURN ON CAPITAL EMPLOYED |
56.73% |
68.81% |
DETAILS OF THE IPO
The present public offer of up to 24,00,000 Equity Shares includes a Fresh issue of 18,00,000 Equity shares and an offer for sale by the Promoter Selling Shareholders of 6,00,000 Equity shares are there to be subscribed at the price of ₹ 186 - ₹ 192.
Some Important details with respect to the Application Size for Qualified Institutional Bidder and Non-Institutional Investor has been Summarised in the following table:
|
Particulars |
Net Issue to Public |
|
Application Size |
For Market Makers: Up to 1,22,400 Equity Shares. For QIB’s: Up to 455,400 Equity Shares. For Retail Investors: Minimum- A minimum lot of 1 i.e., 600 Equity Shares. A minimum investment of ₹1,15,200. For S-HNI: Minimum- A minimum lot of 2 i.e., 1200 Equity Shares. |
OBJECTIVES OF THE IPO
The objective of the issue of the IPO is for (i) APAC – Advertisement, Sales and Marketing expenses towards enhancing the awareness; (ii) Funding of capital expenditure requirements of our Company towards purchase of Office Laptops; (iii) Meeting the working capital expenses; (iv) General corporate purposes and unidentified inorganic acquisition.
RISKS INVOLVED
Analysing the risks connected to delaPlex Limited, one important issue is the company's excessive dependence on a limited group of clients, specifically the corporate promoter (delaPlex INC) and a Group Entity (Xperity LLC). By September 30, 2023, the revenue share of the company's top five clients had increased to 99.37%. While the body corporate client has solid long-term commitments, other customers may not have the same guarantees, which puts company continuity at risk in the event that these agreements fall through. The geographic concentration of revenues in the US increases susceptibility since unfavourable economic circumstances there might have a negative effect on the financial stability of delaPlex Limited. In addition, in order to satisfy changing client wants, the rapidly advancing technology landscape need ongoing innovation. Legal challenges provide an additional risk, as pending litigation may have a negative impact on the company's operations and position in the event of unfavourable outcomes. Additionally, the involvement in related party transactions creates ethical and governance problems due to possible conflicts of interest with equity shareholders.
To sum up, delaPlex Limited is exposed to risks pertaining to client concentration, economic volatility, technical advancements, legal obstacles, and related party deals. Proactive tactics and efficient risk management will be essential for the business to overcome these obstacles and guarantee long-term development and success in the cutthroat technology sector.
ANALYSIS AND RECOMMENDATION
An analysis of financial metrics reveals a strong fiscal performance in DelaPlex Limited's Initial Public Offering (IPO). The firm has steady growth tendencies, as seen by its noteworthy revenue of Rs. 5400.46 Lakhs for the fiscal year 2022–2023. Moreover, the company's profitability is highlighted by a noteworthy profit of Rs. 790.72 Lakhs during the same time. A strong liquidity situation is indicated by a current ratio of 23.49, which guarantees the company's ability to fulfil short-term commitments. A zero debt-to-equity ratio also indicates debt-free status, reducing financial risk. Notably, a return on equity (ROE) of 40.45% and a net profit margin of 14.64% demonstrate effective financial management and the development of shareholder value. The company's skilful use of capital is attested to by its 56.73% return on capital employed (ROCE). According to the IPO documents, up to 24,00,000 equity shares at a price between ₹186 and ₹192 is issued. It is recommended that investors evaluate this in light of price dynamics relative to the company's valuation.
A thorough risk analysis, however, reveals significant difficulties. The main worries are regional revenue concentration, reliance on a small number of clients, and legal concerns. Investors must to carefully examine the company's suggested risk-reduction tactics.
In summary, even if DelaPlex Limited has solid financials, investors should carefully consider the dangers involved. In the fast-paced technology industry, long-term success depends on proactive risk management and strategic innovation in reaction to new developments. The purpose of this research is to provide useful information to prospective investors so they may make wise decisions in the IPO market.
IMPORTANT DATES
|
EVENTS |
DATES |
|
Bid/Issue Opening |
January 25, 2024 |
|
Bid/Issue Closing |
January 30, 2024 |
|
Finalization of Basis of Allotment with the Designated Stock Exchange |
January 31, 2024 |
|
Initiation of Allotment / Refunds / Unblocking of Funds from ASBA Account or UPI ID linked bank account |
January 31, 2024 |
|
Credit of Equity Shares to Demat accounts of Allottees |
February 01, 2024 |
|
Commencement of trading of the Equity Shares on the Stock Exchange |
February 02, 2024 |
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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