Edserv Softsystems is entering the capital market on 5th February 09, with an IPO of 39.74 lakh equity shares of Rs.10 each, in the band of Rs.55 to Rs.60 per share.
The networth of the company as at
The company has been a virtual non-starter for all these years as it is reflected from its aggregate topline of less than Rs.2.50 crores in the years FY 04 to FY 07. In the year 2007, the company acquired ELMAQ, an IT Education and Training Business for Rs.90 lakhs from S. Giridharan and consideration were discharged by issue of convertible debentures of Rs.90 lakhs. This is inspite of the fact that the company had a cash balance of Rs.2.90 crores as at
The company now proposes to go on the lines of Educomp and Everon and chalked out an expansion of Rs.30 crores for which this issue is being made. If you have speculative element, you need to have a role model, and Educomp has been taken by the company. But the promoters forget that there are Software Technology, NIIT, Aptech kind of companies also, which are much larger than this company is going to be, but ruling at a pathetic valuation.
It is sad to see such IPOs hitting the capital market which otherwise was remaining dormant. Definitely, it will kill the prospects of reviving it.
This issue is pure momentum and worthless, not even worth subscribing at Rs.10 per share. Maybe, initial speculative momentum play can take share price to a level but would get settled in single digit.
So why to risk your hard earned money? Use it for the education of your near and dear ones.