Globesecure Technologies
Globesecure Technologies is coming out with an initial public offering (IPO) of 34,92,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 29 per equity share.
The issue will open on May 23, 2022 and will close on May 25, 2022.
The shares will be listed on NSE Emerge Platform.
The share is priced 2.90 times higher to its face value of Rs 10.
Book running lead manager to the issue is Fast Track Finsec.
Compliance Officer for the issue is Heta Desai.
Profile of the company
Globesecure Technologies is a digital transformation company in India with a focus on cyber security. The company has executed several cyber security transformation projects, infrastructure, and digital transformation projects for various institutions and also provide similar independent services to its clients. Through its wide range of offerings across multiple verticals, it possess capabilities spanning the digital lifecycle of services ranging from consultation, architecture, solution design, and implementation, to monitoring and providing managed services. It classify its business into the following lines of business: (i) Cyber Security, (ii) Integrated Enterprise Solutions, and (iii) Managed Services.
The company’s offerings range from entry-level services such as vulnerability assessments and penetration testing at the roadmap stage to solution customization and implementation at the execution stage, onsite as well as remote capabilities at the deployment stage, and comprise more evolved offerings in the form of the ‘pay-per-use’ MSSP model. Its services range from threat intelligence, threat monitoring, and threat detection to threat hunting and incident response, penetration testing and vulnerability management, and brand monitoring services. Its services include comprehensive advisory and managed security services to mitigate breaches and enable its clients to understand the threats they may be exposed to. Its offerings are aimed at equipping its clients with capabilities to assess security intelligence and operations. It also design SOCs for its clients using security analytics platforms from its key security solution partners and build enterprise-class SOCs for its clients. It enable 24x7 threat, detection, and fast response capability, enabled by threat intelligence from multiple sources and proactive threat hunting to identify and remediate advanced threats.
Proceed is being used for:
Industry Overview
India is the world's largest sourcing destination with largest qualified talent pool of technical graduates in the world. According to National Association of Software and Service Companies (Nasscom), the Indian IT industry’s revenue is estimated to reach $194 billion in FY21, an increase of 2.3% YoY. The sector is the largest employer within the private sector. According to Gartner estimates, IT spending in India is estimated to reach $93 billion in 2021 (7.3% YoY growth) and further increase to $98.5 billion in 2022. As of FY21, the IT industry employed 4.5 million people. This push towards cloud services has boosted hyper-scale data centre investments, with global investments estimated to exceed $200 billion annually by 2025. India is expected to gain a significant share in the global market, with the country's investment expected to hit $5 billion annually by 2025. According to the research findings commissioned by Amazon Web Services (AWS), Indian enterprises and public sector organisations (that migrated from on-premises data centres to cloud infrastructure) can expect to lower their energy and carbon footprint by over 80%.
The Indian mobile gaming market is growing at a pace in tandem with the global trend and is expected to reach $7 billion in 2025. In Budget 2021, the government has allocated Rs 53,108 crore ($7.31 billion) to the IT and telecom sector. The IT industry accounted for 8% of India’s GDP in 2020. Exports from the Indian IT industry are expected to increase by 1.9% to reach $150 billion in FY21. India's software services exports (excluding exports through commercial presence) increased by 4% in FY21 compared with FY20 and are estimated at $133.7 billion during 2020-21. In 2020, the IT industry recorded 138,000 new hires. According to STPI (Software Technology Park of India), the software exports by its registered units increased by 7% YoY to reach Rs 5 lakh crore ($67.40 billion) in FY21 from Rs 4.66 lakh crore ($62.82 billion) in FY20, driven by rapid digitization and the IT industry's timely transition to remote working environments that helped to keep up the industry’s growth amid coronavirus pandemic. According to STPI (Software Technology Park of India), software exports by the IT companies connected to it, stood at Rs 1.20 lakh crore ($16.29 billion) in the first quarter of FY22.
Pros and strengths
Dedicated tech support team: The company has an experienced management team with significant expertise in the IT Services industry. Its management team collectively has many years of entrepreneurial and managerial experience in its industry. This has facilitated efficient operational coordination and continuity of effective business strategies. Their industry experience enables it to anticipate and address variance in customer specifications, manage and grow its operations, maintain and leverage customer relationship.
Handled complex migration projects: Over the years, the company’s experienced team has also efficiently handled complex projects without involvement of a technical team such as migration of 18,000+ Firewall policies/objects from one OEM to another involving a lot of manual effort and time to complete the project. It work to introduce new solutions preferably with some exclusivity through a deep analysis of client`s system it also help them to solve problems outside its scope of work and proactively highlight problems and Solutions.
Dynamic revenue model with continued relation with clientele: The company combine its expertise with an understanding of the IT products and services market developed through client feedback and extensive interaction on addressing issues. Its existing long term client relationship improves customer retention strategy, repeat business from existing customers and well as get referred to new prospective clients. It started with just one project and now receive recurring business from few of the big banking institutions. Its revenue model now consists of a mix of recurring/ annual business through long term contracts, AMCs, outsourced contracts as well as project based revenue from Consulting/Implementation projects. By providing these range of services, it constantly try to address customers’ growing needs and enable to form a portfolio of renowned customers in the BFSI sector.
Risks and concerns
The company’s sales cycles can be long and unpredictable: Due to the resource intensive nature of the company’s sales efforts, the length and variability of its sales cycle and the short-term difficulty in adjusting its operating expenses, its results of operations may fluctuate. The length of its sales cycle, from proof of concept to delivery of and payment for its solutions, is typically a few months and may extend for longer durations in certain circumstances. As the length of time required to close a sale varies substantially from client to client, it is difficult to predict exactly when, or even if, it will make a sale with a potential client. In addition, as most of its clients typically allocate their IT budgets in the second half of the Fiscal year, it record an increase in revenue from contracts with customers in the fourth quarter (January to March). The loss or delay of payment in relation to one or more of these large transactions in a quarter could impact its results of operations for that quarter and any future quarters for which revenue from that transaction is delayed.
Face competition: The IT services market is highly competitive, and it expect competition to continue and intensify. The major competitive factors are reputation and track record, industry expertise, breadth and depth of service offerings, quality of the services offered, language, marketing and selling skills, scalability of infrastructure, ability to address customers’ timing requirements and pricing. Customers tend to engage multiple IT services providersinstead of using an exclusive IT services provider, which could reduce company’s revenues to the extent that customers obtain services from other competing IT services providers. Customers may prefer IT services providers that have more locations and thus more cost- effective. Its ability to successfully compete also depends on a factors beyond company's control, including the ability of its competitors to recruit and retain highly-skilled IT professionals, the price at which its competitors offer comparable services and its competitors’ responsiveness to client needs.
Require certain statutory and regulatory approvals: The company require certain statutory and regulatory approvals, licenses, registrations and permissions, and applications need to be made at the appropriate stages for its business to operate. Although it it has obtained required licenses and approvals for carrying its business activity, there can be no assurance that the relevant authorities will renew these approvals or licenses in a timely manner. Further, under such circumstances, the relevant authorities may initiate penal action against us, restrain its operations, impose fines/ penalties or initiate legal proceedings for its inability to renew/obtain approvals in a timely manner or at all. As a result, it may not be able to execute its business plan as planned. An inability to obtain or maintain approvals or licenses required for its operations may adversely affect its operations.
Outlook
Globesecure Technologies is a digital transformation company in India that offers cyber security services. The company has executed several cyber security transformation projects, infrastructure, and digital transformation projects for various institutions and individuals. The company's business line is classified into three divisions: Cyber Security, Integrated Enterprise Solutions, and Managed Services including cyber forensics, cyber security, data security services, protection of computer networks, Email security, server consolidation and transformation, hosting, infrastructure-as-a-service, cloud-based big data and analytics solution, application modernization, etc. To help achieve faster cyber security maturity, it offer 24X7 threat prevention, detection and fast response capabilities, enabled by threat intelligence from multiple sources and proactive threat hunting to identify and remediate advanced threats using the pay-peruse mode. It offer an end-to-end portfolio of consulting, implementation, and MDR services, providing end-customers with a one-stop cyber security solution that maximizes and extends their investment and advances their security posture. On the concern side, the company is exposed to foreign exchange related risks as a portion of its purchase expenses, including- Import of Licence from vendors outside India, are in foreign currency (US Dollar). Besides, a significant increase in the attrition rate among skilled IT professionals with specialized skills could decrease its operating efficiency and productivity and could lead to a decline in demand for its services.
The company is coming out with a maiden IPO of 34,92,000 equity shares of Rs 10 each at a fixed price of Rs 29 per share to mobilize around Rs 10.12 crore. On performance front, the company’s total revenue decreased marginally by 0.09% to Rs 1922.57 lakhs for the financial year 2020-21 from Rs 1924.27 lakhs for the financial year 2019-20. Due to reasons mentioned above, the company’s profit after tax increased by 750% to Rs 100.47 lakhs for the financial year 2020-21 from Rs 11.82 lakhs for the financial year 2019-20. Meanwhile, the company intends to continue to focus on expanding its client base by focusing on offering its digital transformation offerings led primarily by Cyber Security solutions to new clients. It intends to target clients who have the potential to offer opportunities with large contract values. It also intend to refine its pricing strategy to make its offerings more competitive while remaining margin accretive. It also intend to scale its marketing efforts to increase market outreach through media mentions, conducting regular e-mail and social media campaigns and publishing thought leadership content.
