Infurnia Holdings
Infurnia Holdings is coming out with an initial public offering (IPO) of 3,82,00,000 equity shares of face value of Rs 1 each for cash at a fixed price of Rs 10 per equity share.
The issue will open on September 6, 2022 and will close on September 9, 2022.
The shares will be listed on SME Platform of BSE.
The share is priced 10 times higher to its face value of Rs 1.
Book running lead manager to the issue is Finshore Management Services.
Compliance Officer for the issue is Himani Rishi Dawda.
Profile of the company
Infurnia, is an architecture and interior design software Company. The company was set up in 2014 by Nikhil Kumar and Lovepreet Mann. It owns, developed and operates a cloud-based platform that allows professionals to design buildings, interiors, and modular kitchens. Infurnia provides a viable alternative to architects looking to work in a more collaborative environment, not just in terms of the designs but also how that design data is shared across the various stakeholders in a project.
A core pillar of Infurnia’s vision is to create an integrated platform where all the stakeholders involved in the design, build and operate phases of a building lifecycle can seamlessly communicate over same digital design with each other; from the architects designing the building to the engineers performing strength analysis; from the site contractors developing the project to the facilities managers operating it; from the interior designers to the end customers; from the furniture retailers to the modular furniture manufacturers. This will enhance productivity and bring digital accountability on every stakeholder’s action across disciplines throughout the life cycle of the project. Infurnia’s flagship product is a cloud-native architecture and interior design software, by the same name as Infurnia.
Proceed is being used for:
Industry overview
The global sourcing market in India continues to grow at a higher pace compared to the IT-BPM industry. India is the leading sourcing destination across the world, accounting for approximately 55% market share of the $200-250 billion global services sourcing business in 2019-20. India's rankings improved four places to 46th position in the 2021 edition of the Global Innovation Index (GII). The IT industry accounted for 8% of India's GDP in 2020. 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. According to the National Association of Software and Service Companies (Nasscom), the Indian IT industry's revenue is expected to touch $227 billion in FY22 from $196 billion in FY21. According to Gartner estimates, IT spending in India is expected to increase to $101.8 billion in 2022 from an estimated $81.89 billion in 2021. Indian software product industry is expected to reach $100 billion by 2025. Indian companies are focusing to invest internationally to expand global footprint and enhance their global delivery centres.
The data annotation market in India stood at $250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach $7 billion by 2030 due to accelerated domestic demand for AI. Exports from the Indian IT industry stood at $149 billion in FY21. Export of IT services has been the major contributor, accounting for more than 51% of total IT export (including hardware). BPM and Engineering and R&D (ER&D) and software products exports accounted for 20.78% each of total IT exports during FY21. ER&D market is expected to grow to $42 billion by 2022. The IT industry added 4.5 lakh new employees in FY22 (as of February), the highest addition in a single year. Women accounted for 44% of the total new employees. India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. Indian IT & business services industry is expected to grow to $19.93 billion by 2025.
Pros and strengths
Strong team with deep technical experience: The company has a strong management team and its tech team consists exclusively of developers hired from the top technology colleges of India with a majority of them graduates of Indian Institutes of Technology (IITs). Its industry is a deep technology industry and developing software in this industry requires very strong technical know-how and high aptitude. The makeup of its team provides it a significant competitive advantage. Its team is also highly motivated and invested in the growth of the company through its employee friendly ESOP scheme.
Cloud-first and collaboration-focused software: The company’s software is built with a web-first approach. This provides it with a lot of inherent advantages. The first one being accessibility on all kinds of devices with a working internet connection. With the rising percentage of computing devices being mobile (mobile phones, iPads, android tablets, etc.), this is increasingly a must-have requirement for businesses. The second big advantage is that collaborative work and sharing data becomes a native workflow in the software. Multiple designers/stakeholders can work on the same design at the same time from their own accounts, and real-time up to date designs can be shared with customers with just a link. In an increasingly complex industry where any project requires tens of teams to work together, being able to natively work on designs is a huge advantage. As most of its competitors are desktop-based, this provides it a huge competitive advantage.
Multi-platform technology: Being cloud-first allows the company to provide Infurnia software on all platforms via the web. And while this provides many benefits, one of the disadvantages is that for large architectural projects like Hospitals, multibuilding residential complexes, etc., the browser environment provides insufficient computing power. For catering to such projects, it needs to be available on native platforms like Windows, macOS, etc. For this, it has architected the software in a natively multi-platform structure. This will allow it to re-use most of the same codebase while rolling out applications for all the major platforms. This provides it a lot of competitive advantage as it will allow architects / designers to work on their platform of choice. The current dominant software in the industry, a well known US based product, which is available natively only on Windows.
Risks and concerns
Operates in highly competitive environment: The market for technology services in India has gained great momentum and is highly competitive and rapidly evolving. The IT service industry has already some well-established names and companies. Thus, the company might face competition from other Indian and as well as International technology services companies. Some of its competitors may have significantly greater financial, technical and marketing resources and might be generating greater revenues. Further, some of them have a pan-India presence resulting in better brand recall across India and have long-standing relationships with their clients within and outside its country and are therefore the preferred service providers for many of the clients. The company cannot assure its investors that it will be able to retain its clients or attract new clients while competing successfully against such competitors.
Dependent on expertise of its senior management, key personnel: The company is dependent on its senior management team for setting up strategic direction and managing its business, both of which are crucial to its success. Given the substantial experience of the company’s senior management team, in the event any or all of them leave or are unable to continue to work with the company, it may be difficult to find suitable replacements on time or at all. Thus, the company’s ability to retain experienced personnel as well as senior management will also in part depend on maintaining appropriate staff remuneration and incentive schemes. The company cannot be sure that the remuneration and incentive schemes currently in place will be sufficient to retain the services of senior management and skilled people.
Does not have strong brand recall pan India: The “Infurnia” brand is not very well recognised outside Bangalore. As a result, the company might face difficulty in attracting and retaining new customers who are brand oriented. Further, the company might also face difficulty in attracting skilled software professionals from outside Bangalore, who prefer to work with companies which are recognised pan-India, have offices across India and abroad and have an instant brand recall, at least with people associated with the IT industry in India.
Outlook
Incorporated in 2014, Infurnia Holdings, is an architecture and interior design software company. The company owns, developed and operates a cloud-based platform that allows professionals to design buildings, interiors, and modular kitchens. The following can be achieved using Infurnia's design software: Floorplan Design, 3D Building Information Modelling Design, Elevation Drawings, Photorealistic renderings, Design Documentation, Powerful pricing quotation module, Design Version Control and Design Branching and Provides a powerful admin portal along with the core design software. Its software is built with a web-first approach. This provides it with a lot of inherent advantages. The first one being accessibility on all kinds of devices with a working internet connection. With the rising percentage of computing devices being mobile (mobile phones, iPads, android tablets, etc.), this is increasingly a must-have requirement for businesses. The second big advantage is that collaborative work and sharing data becomes a native workflow in the software. On the concern side, the company might require additional capital from time to time depending upon the requirements of the business. Any fresh issue of shares or convertible securities would dilute the shareholding of the existing shareholders and such issuance may be done on terms and conditions, which may not be favourable to the then existing shareholders. Besides, the company has a limited operating history and may be subject to risks inherent in early-stage companies, which may make it difficult for investors to evaluate the business prospects of the company.
The company is coming out with a maiden IPO of 38200000 equity shares of Rs 1 each at a fixed price of Rs 10 per share to mobilize around Rs 38.20 crore. On performance front, the company’s total revenue from opration for FY 2021-22 was Rs 13.71 lakh, for FY 2020-21 was Rs 26.39 lakh and for FY 2019-20 was Rs 2.42 lakh respectively. The company has reported net loss of Rs 277.15 lakh in FY22 as against net loss of Rs 265.04 lakh in FY21. Meanwhile, the company’s collaboration features as well as its admin dashboard (with functionality like catalogue management, user management, custom roles, etc.) offers significant value to companies with a large number of designers. This makes them a better fit for it as a customer segment. There is also an opportunity to expand the revenue generated from these customers as they grow. However, it will be focused on smaller companies as well in time to come.
