Fidel Softech is a Private limited company based out of Maharashtra, incorporated in 2004 which deals in Localization services, Technology implementation, Consulting and other staffing services. They are ISO9001 and ISO27001 Certified and work with clients across diverse domains.
Fidel Softech Private Limited has 2 appointed directors/decision makers Sunil Sudhakar Kulkarni and Prachi Sunil Kulkarni. They have a paid up share capital of around 10.1 crores and wish to expand the same with an SME IPO for the motives of which shall be discussed below.
Fide Softech IPO Details
- The Company has decided to go public with an issue size of 13.5 crores
- IPO opens on may 30th 10.00 AM and closes June 2nd 5.00 PM IST
- Allotment date is set on 7th June
- The Minimum lot Size is 3000 shares with a price bandwidth of Rs 37 per share
- The shares will be listed on 10th June 2022.
- An individual can maximum apply for 1 lot.
- The IPO lead managers are Shreni Shares private limited
Key Points on Capital Structure
- The Debt to Equity ratio is 0.07 which is quite low compared to industry standards
- More than 98% of the Equity share capital belongs to two of the promoters
- There has been no change in shareholding during the previous year
- Return on Equity is at 30.68%
- Earnings per share is 4.52 Rs. With NAV at 14.73rs
- There is no real long term debt, there are only provisions towards employee benefits
- They hold an overdraft account currently at 1.6cr credit which is secured against mutual funds and fixed deposits.
- There was an incredible amount of increase in equity share capital funded by the promoters of the company.
Revenue and operations
The revenue earned for the FY 2021-22 was Rs 26.3 crores when compared to a previous year figure of 25.71 crores. When compared to previous year, all of the company’s costs have gone down barring finance costs which could mean heavy bank transactions or loan interests incurred.The basic and diluted loss per share has gone down significantly from 136.60 rs in 2020-2021 to 4.52 in 2021-2022.
Fidel Softech trains its engineers in various languages & technology & works closely with Asian geography clients. they have 165 employee base in its Company at various levels and it intend to increase the same so that they are able to take up more projects and thereby increase its revenue from operations and achieve growth in the industry.
Custom software also includes made-to-order software based on orders from specific users. Also, included are writing of software of any kind following directives of the users; software maintenance, web-page design
Majority of the company’s revenue comes from Exports amounting to about 86% of total revenue. They are majorly into Technology Implementation Services such as Software development, Testing, Enterprise solution Implementation & Support.
They specialize in Data analytics & AI-ML, Cloud Infrastructure and Enterprise Solution. Company’s customer base is spread across the globe with presence in countries like Argentina, Belgium, China, Cyprus, Czech Republic, Dubai, Egypt, Germany, Hong Kong, Ireland, Italy, Japan, Kingdom of Saudi Arabia, Malaysia, Mauritius, Netherlands, New Zealand etc.
Key points from operations
- Significant increase in Legal and Professional fee
- Big spike in License fees
- Sizeable increase in current ratio
- Company has no outstanding demands from revenue authorities
- Constant upgradation
- Alliances with global level investors and domestic leaders
- Cloud based Infrastructure
- Large Customer base
- Rapid growth in scale and efficiency
- Good working capital ratio
- Low debt company
- Decline in return on equity
- Reduction in trade payables turnover ratio
- Big drop in fixed assets total
- Company has few dues to micro and small enterprises
- Highly Dependent on Network Infrastructure which could be hard to sustain over time.
Fidel softech has been able to deliver very promising results when compared to their size of business. Their reliance in technology and cloud based operations is what has brought them so far ahead but this same reason could also be a bane for them in the future.
If companies like these fail to cope up with the constantly moving technological changes, They will eventually succumb to obsolescence. However they have been showing rapid growth, scale and synergies across various lines of business.
It seems to me that the positives outweigh the negatives and hence my opinion would be to go ahead with a medium to long range investment on this one. Once the share is listed the true value of the company will be brought forward.