SRIT India

SRIT India

By Geetanjali Kedia
about 6 days ago

IPO Size: Rs. 218 cr, entirely Fresh Issue

  • For working capital Rs. 124 cr
  • Capex Rs. 13 cr
  • Unidentified acquisition and general corporate purposes

Price band: Rs. 123-130 per share

  • During Aug-Nov 2025, it raised Rs. 28.5 cr via pre-IPO at Rs. 95 per share

M cap: Rs. 836 cr, implying 26% dilution

IPO Date: Mon 28th Sep to Wed 30th Sep 2026, Listing Tue 6th Oct 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

IT company serving Government and Telecom sector

SRIT India is a 26-year-old Bengaluru based information technology (IT) company providing technology-enabled solutions, system integration, operations and maintenance services to Government clients and Enterprises. Rs. 450 cr revenue is split between electronic governance (68%), telecommunications and broadband (24%) and healthcare (7%).

 

Declining Order Book

As of 30.6.26, company’s order book stood at Rs. 1,205 cr, representing 2.7x of FY26 revenue of Rs. 450 cr. However, order book has been declining, from Rs. 1,657 cr as of 31.3.23, mainly due to drop in its largest segment i.e. electronic governance.  

 

Disparity in Order book for FY25 and FY24

DRHP mentioned FY25 order book as Rs. 1,513 cr while the RHP reduced it to Rs.1,216 cr for FY25. Similar discrepancy for FY24 order book at Rs. 1,511 cr in DRHP, which drops to Rs. 1,477 cr in RHP. Why the diversion when DRHP was also as recent as 20th Jan 2026 i.e. dated much after FY24 and FY25.

As a potential investor, which number to trust? Also, is current order book of Rs. 1,205 cr subject to change?

 

Huge Working Capital

Company’s revenue has risen from Rs. 271 cr in FY24 to Rs. 450 cr in FY26 at 29%  CAGR. But in FY26, working capital has more than doubled to Rs.150 cr as of 31.3.26, from Rs. 65 cr as of 31.3.25, now representing 4 months of revenue. This is when revenue has increased by 16% during FY26. For future, company needs significant amount of working capital. Hence the 26% dilution.

While company’s gross debt stood at Rs. 36 cr as of 31.3.26, interest cost for FY26 was Rs. 14 cr, as company finances its long working capital cycle through a large trade payables of Rs. 235 cr. On this, Rs. 6.9 cr was interest expense on significant financing component of trade payable. On the other hand, other income stood at Rs. 13 cr, which is mainly Interest Income on Significant Financing Component of Trade Receivables. Thus, roughly 1/4th of company’s profit before tax of Rs. 55 cr is financing income.

 

Fully Pricing

M cap of Rs. 836 cr implies a historic PE multiple of 14x, on FY26 PAT of Rs.43 cr (9.6% net margin) and an EPS of Rs. 9.47. On FY27E estimated EPS of Rs. 11.50, the current year PE multiple is about 11x, while PE excluding the other income or financing income, is about 14.5x, which is fully priced, as RoE will shrink to 13-14% post IPO.

A 37% premium from the pre-IPO price in 10 months is only partly justified as PAT grew 28% YoY in FY26.

 

Fun Fact

SRIT IPO’s book running lead manager is Choice Capital. The IPO anchor book comprises 15% each allotted to Sunil Singhania’s Abakkus Venture and Madhu-Kela led Founders Collective Fund.

Interestingly, Madhu Kela holds 7% stake in Choice International and about 9% stake in Abakkus Asset’s parent company. Can such a shareholding pattern have any implications for future share price movement? Only time will tell.