What You Must Know About Trafiksol ITS Technologies IPO: Price Band ₹66 to ₹70 Per Share

TrafikSol ITS Technologies Limited was founded in 2018 and provides comprehensive intelligent transportation systems (ITS) and automation solutions, including software development, consulting and delivery services. The company offers ready-made and customised software solutions, operating systems, business applications and computer games for all platforms. TrafikSol analyses user needs and problems to deliver customised software solutions, including tailor-made software and ongoing maintenance. As a specialised EPC (Engineering, Procurement and Construction) company, Trafiksol carries out a variety of projects in areas such as Advanced Traffic Management Systems (ATMS), Toll Management Systems (TMS) and Tunnel Management Systems.

The company's services and solutions include Advanced Traffic Management System (ATMS), Toll Management System (TMS), Tunnel Management System (TNMS), Highway lighting, Transmission and distribution services, Solar energy solutions, Speeding detection systems, Integrated Command and Control Centers (ICCC), and Defense services. Trafiksol's competitive strengths lie in its mission-independent platform design, experienced promoters and management team, established customer relationships, integrated structure with internal capacity, ability to financially close projects, and a diversified portfolio of services. The company stands out from the market with its comprehensive solutions tailored to customers' changing needs. As of 31st March 2024, the company had 104 permanent employees in various departments.

The Objectives of the Issue

Trafiksol ITS Technologies Limited intends to utilise the Net Proceeds from the Issue towards funding the following objectives:

1. Software Purchase: To acquire necessary software for business operations.
2. Debt Repayment: Repayment or prepayment, in part or full, of certain borrowings.
3. Working Capital: To meet the working capital requirements of the Company.
4. General Corporate Purposes: For various corporate activities aligned with the company's strategic goals.

Highlights of Trafiksol ITS Technologies IPO

Trafiksol ITS Technologies IPO is set to launch with a book-built issue of ₹44.87 crores. The issue is entirely fresh. Here are the key details of the IPO:
 

• Trafiksol IPO opens for subscription on 10th September 2024 and closes on 12th September 2024.
• The allotment is expected to be finalised on 13th September 2024.
• Refunds will be initiated on 16th September 2024.
• Credit of shares to Demat accounts is also expected on 16th September 2024.
• The company will tentatively list on BSE SME on 17th September 2024.
• The price band is set at ₹66 to ₹70 per share.
• The fresh issue comprises 64.1 lakh shares, aggregating to ₹44.87 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹140,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹280,000.
• Ekadrisht Capital Private Limited is the book-running lead manager for the IPO.
• Maashitla Securities Private Limited serves as the registrar.
• Ss Corporate Securities is the market maker responsible for 322,000 shares.

Trafiksol ITS Technologies IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 12th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Trafiksol ITS Technologies IPO Issue Details/Capital History

The Trafiksol ITS Technologies IPO is scheduled from 10th September to 12th September 2024, with a price band of ₹66 to ₹70 per share and a face value of ₹10. The total issue size is 6,410,000 shares, raising up to ₹44.87 crores through a fresh issue. The IPO will be listed on the BSE SME, with the shareholding increasing from 17,925,000 pre-issue to 24,335,000 post-issue. Ss Corporate Securities is the market maker responsible for 322,000 shares within the issue.

Trafiksol ITS Technologies IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:
 

Investors can place bids for a minimum of 2000 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Trafiksol ITS Technologies Ltd

Strengths:

• Mission-independent platform design, ensuring flexibility and agility for different customer requirements
• Experienced promoters and management team with expertise and vision to lead and grow the business
• Established relationships with customer base and expanded customer network through geographic expansion
• Integrated structure with internal capacity to carry out most activities related to projects
• Proven ability to financially close projects, evidenced by the number of completed projects in recent years
• A diversified portfolio of services, offering comprehensive solutions tailored to changing customer needs

Weaknesses:

• A relatively young company established in 2018, which may limit its long-term track record
• Potential dependency on government contracts and infrastructure projects
• Limited geographical presence, primarily focused on the Indian market

Opportunities:

• Growing demand for intelligent transportation systems and automation solutions in India and globally
• Potential for expansion into new geographical markets and sectors
• Increasing government focus on smart city initiatives and infrastructure development
• Rising need for efficient traffic management and toll collection systems

Threats:

• Intense competition in the intelligent transportation systems and EPC sectors
• Rapid technological changes requiring constant innovation and adaptation
• Economic downturns affecting government spending on infrastructure projects
• Regulatory changes impacting the transportation and technology sectors

Financial Highlights: Trafiksol ITS Technologies Ltd

Below are the consolidated financial results for the Fiscal years FY24, FY23, and FY22:
 

DRHP

Trafiksol ITS Technologies Limited has demonstrated impressive financial growth over the past three fiscal years. The company's assets have grown significantly, increasing from ₹2,284.01 lakhs in FY22 to ₹6,215.52 lakhs in FY24, representing a growth of about 172% over two years. This substantial asset increase indicates significant expansion in the company's operational capabilities and infrastructure.

Revenue has shown remarkable growth, rising from ₹2,801.92 lakhs in FY22 to ₹6,608.5 lakhs in FY24, marking an impressive increase of 135.9% over two years. The year-over-year growth from FY23 to FY24 was 80%, indicating strong market demand for the company's services and solutions.

The company's profitability has seen a similar upward trajectory. Profit after tax rose significantly from ₹205.19 lakhs in FY22 to ₹1,209.3 lakhs in FY24, representing an extraordinary growth of 489.4% over two years. The year-over-year growth in PAT from FY23 to FY24 was 153%, showing improved operational efficiency and cost management.

Net worth has shown consistent and strong growth, increasing from ₹730.94 lakhs in FY22 to ₹3,412.62 lakhs in FY24, a growth of about 366.9% over two years. This increase reflects the company's ability to generate and retain earnings, significantly strengthening its financial position.

Total borrowings have increased from ₹506.42 lakhs in FY22 to ₹1,050.24 lakhs in FY24, an increase of about 107.4%. While this represents a significant increase, it should be viewed in the context of the company's even more substantial growth in revenue and assets.