Take Solutions is entering the capital market on 1st August 2007 with a public issue of 21 lakh equity shares of Rs.10 each in the price band of Rs.675 to Rs.730 per share.
The company is into providing software products and services for Supply Chain Management (SCM) and Life Sciences (LS) Verticals and have 16 products in SCM vertical and have 6 products under LS vertical. Upto
The company kept growing by acquiring various companies in
On consolidated basis for FY 07, the company had total income of Rs.182.83 crores on which PAT was placed at Rs.31.64 crores on equity base of Rs.9.37 crores resulting in an EPS of Rs.33.77. The present equity of the company is Rs.9.90 crores which would rise to Rs.12 crores, post issue. Promoters stake would fall to 59.32% from 71.90%. The net worth of the company as at
The company has now estimated a fund requirement of about Rs.142 crores of which Rs.104 crores is for repayment of debt availed for acquisitions in the past and for pre-payment of term loan. Rs.38 crores has been earmarked for product development and enhancement of domestic infrastructure facilities. Acquisition of companies/business/products seems to be main focus for which no fund has been earmarked The entire fund is being mobilized from the proposed issue.
Since major chunk of the fund shall get used for loan repayment nothing much shall get used for improved performance. Considering PAT of Rs.31.64 crores for FY 07 EPS translates to Rs.26.36 on expanded equity base of Rs.12 crores. At the upper band of Rs.730, share is richly valued at a PER of close to 28. No doubt, product IT companies are always richly valued, but this is quite steep.
Also due to low market perception for IT stocks, investment is not recommended in the issue.