What You Must Know about S A Tech Software India IPO: Price Band ₹56 to ₹59 per share

About S A Tech Software India Ltd

Founded in 2012, S A Tech Software India Limited is an IT consulting subsidiary of SA Technologies Inc, USA. The company offers a wide range of services, including application development, mobile app development, cloud infrastructure, software quality assurance, generative AI, machine learning, IoT solutions, and data science and analytics. S A Tech Software India provides technology services and digital transformation services to Fortune 500 clients, helping them conceptualize, design, develop, and deliver superior products. Their offerings encompass artificial intelligence and machine learning, software development and engineering, digital transformation and automation, cloud and DevOps services, quality assurance and testing, and the Global Capability Centre (GCC). As of September 30, 2023, the company employed 356 individuals. 

Highlights of the S A Tech Software India IPO

Here are some of the highlights of the S A Tech Software India IPO on the SME segment of the National Stock Exchange (NSE).

•    S A Tech Software India IPO is a book-built issue valued at Rs 23.01 crores, with the entire issue consisting of 39 lakh fresh shares. The IPO will be open for subscription from July 26, 2024, to July 30, 2024, with allotment expected on July 31, 2024, and listing on the NSE SME scheduled for August 2, 2024.
•    The IPO price band is set between ₹56 to ₹59 per share, with a minimum application lot size of 2000 shares, requiring a minimum investment of ₹118,000 for retail investors. High Net-worth Investors (HNI) must invest in a minimum of 2 lots (4000 shares), amounting to ₹236,000.
•    GYR Capital Advisors Private Limited is the book-running lead manager, and Bigshare Services Pvt Ltd is the registrar for the issue. Giriraj Stock Broking is the market maker for the S A Tech Software India IPO.
•    The IPO aims to raise capital through the fresh issuance of shares, offering an opportunity for investors to partake in the company's growth and expansion plans within the IT consulting sector.
•   GYR Capital Advisors Private Limited will be the lead manager to the issue, and Bigshare Services Pvt Ltd will be the registrar to the issue. The market maker for the issue is Giriraj Stock Broking Private Ltd.
The IPO of S A Tech Software India Ltd will be listed on the SME IPO segment of the NSE.

S A Tech Software India Ltd IPO: Key Dates

Data Source: Company RHP

In ASBA applications, there is no refund concept. The total application amount is blocked under the ASBA (applications supported by blocked amounts) system. Once the allotment is finalized, only the amount is debited to the extent of the allotment made and the lien on the balance amount is automatically released in the bank account. The credit of shares to the demat account on August 1, 2024, will be visible to investors under the ISIN Code. This credit to the demat account is only applicable to the extent of the allocation of shares and if no allocations are made in the IPO, then no credit would be visible in the demat account.

S A Tech Software India IPO: Lot Sizes for Investment

The S A Tech Software India IPO allocates shares with up to 50% reserved for Qualified Institutional Buyers (QIBs), at least 35% for retail investors, and a minimum of 15% for Non-Institutional Investors (High Net-worth Individuals, HNIs). The breakdown of the overall IPO of S A Tech Software India Ltd in terms of allocation to various categories are captured below.

Data Source: Company RHP

Investors can bid for a minimum of 2000 shares and in multiples thereof. The below table depicts the minimum and maximum investment by retail investors and HNI in terms of shares and amount. For the S A Tech Software India IPO, the minimum and maximum application for retail investors is 1 lot consisting of 2,000 shares, amounting to ₹118,000. For HNI investors, the minimum application is 2 lots, totaling 4,000 shares, amounting to ₹236,000.
 

S A Tech Software India Ltd: Financial Highlights

The table below captures the key financials of S A Tech Software India Ltd for the last 3 completed financial years. 

Data Source: Company RHP filed with SEBI

Here are some of the key takeaways from the financials of the company for the last 3 years; i.e., from FY22 to FY24, being the latest year. 

- S A Tech Software India Limited's revenue saw a significant increase of 27.59%, and the profit after tax (PAT) rose dramatically by 266.7% from March 31, 2023, to March 31, 2024.
- The company's total assets grew from ₹3,465.95 lakhs in March 2023 to ₹4,703.23 lakhs by June 2024, indicating a strong expansion in its financial base.
- Despite an increase in total borrowing from ₹1,288.12 lakhs to ₹2,105.22 lakhs by June 2024, the company's net worth also improved from ₹772.48 lakhs in March 2023 to ₹1,414.43 lakhs by June 2024, showcasing robust financial growth and stability.

To be fair, S A Tech Software India Ltd does bring some intangible advantages to the table. Investors must look at the IPO from a longer term perspective with a holding period of 1-2 years. Like more pure manpower based businesses, this also does carry higher risk implicit in such IPO stocks. We have seen in many of the people-based businesses that valuations can be quite volatile. For now, the company has the moat to fend off competition, and investors can take a risk of a long term play.