Infollion Research Services coming with an IPO to raise upto Rs 21.45 crore

Infollion Research Services

• Infollion Research Services is coming out with a 100% book building; initial public offering (IPO) of 26,16,000 shares of Rs 10 each in a price band Rs 80-82 per equity share.
• The issue will open for subscription on May 29, 2023 and will close on May 31, 2023.
• The shares will be listed on NSE Emerge Platform.
• The face value of the share is Rs 10 and is priced 8.00 times of its face value on the lower side and 8.20 times on the higher side.
• Book running lead manager to the issue is Holani Consultants.
• Compliance Officer for the issue Madhumita Pramanik.

Profile of the company

The company’s website www.infollion.com is its tech-oriented platform and all its Services are rendered to this platform along with the on boarding of the experts who provide services that fulfil the needs of its clients. The company is a tech-oriented marketplace, operating in the B2B Human Cloud segment, catering to on-demand contingent hiring and work arrangements with senior management talent, subject matter experts, and high-ranking, seasoned professionals. It provides a platform for workers or knowledge providers (gig workers) and employers or knowledge seekers to connect and find synergetic outcomes. Its key clients include top-tier Global Management Consulting firms, renowned Private Equity funds, Hedge funds, and mid-tier Corporates. Its proprietary technology stack and research capabilities empower it to assist its clients in connecting with custom-curated, precise, and vetted subject matter experts.

It operates in the premium segment of the gig-economy and are one of the enablers of contingent hiring, temporary workforce management, contracting SOW-employees, high-level independent consultations, knowledge tours, and more. It caters to global hiring requirements for its domestic and international clients. The company is promoted by first generation entrepreneur Mr. Gaurav Munjal having rich experience and exposure of around 15 years in working at the junction of technology and HR in the on demand employment space who have proven to be instrumental to the business operations of the company.

Proceed is being used for:

• Expansion of current service line in the US and Western European regions.
• Pex-Panel- Adding new categories of freelancers.
• Technology development.
• General corporate purposes.

Industry overview

As per Indian Staffing Federation, the staffing industry in India is estimated at nearly 33 crore, totalling $10 billion or Rs 80,000 crore and it is expected to grow to around $60 billion or Rs 480,000 crore by the year 2030. The Indian staffing industry added new jobs or employment opportunities at 21.9% YoY (2021-22), compared to a meager 3.6% new jobs or employment generated in 2020-21. The new employment generated was at a significantly higher growth rate than even pre-pandemic years, indicating robust growth and positive outlook for the coming years. The general staffing industry was largely driven by sectors like E-commerce, FMCG, Manufacturing, Logistics, Banking, Healthcare, Retail, Energy etc., while the IT staffing also witnessed a sharp increase in growth at 30.7% as compared to 14.1% in the previous year.

The study estimates that in 2020-21, 77 lakh (7.7 million) workers were engaged in the gig economy. The gig workforce is expected to expand to 2.35 crore (23.5 million) workers by 2029-30. At present about 47% of the gig work is in medium skilled jobs, about 22% in high skilled, and about 31% in low skilled jobs. Trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing. It may be expected that while the domination of medium skills would continue till 2030, gig work with other skills will emerge

Pros and strengths

Long lasting business relationships: It focus on building sustained and long-term client relationship with its clients and constantly try to cater their needs with services in demand. It has a strong history of working with globally renowned management consulting firms, private equity funds, hedge funds, and mid-to-large corporations. A majority of its revenue comes from repeat business from clients which is a testament to its endeavor of establishing and maintaining long-lasting relationships with all of clients. Its top 10 clients contributed to 87.76%, 79.53% and 86.69%, of its total revenue from operations for the year ended on March 2023, 2022 and 2021 respectively, as per its Restated Financial Statements.

Comprehensive talent pool: It has an extensive pool of over 57 thousand seasoned professionals, SMEs, key opinion leaders, and C-level executives in its network, covering a wide spectrum of industries, functional expertise, and geographies. 

Strong research capabilities: Its strong in-house research capability is probably one of its strongest assets, enabling it to deliver its services with superior quality, high-precision, and excellent turnaround times. Its dedicated research team, specialized in carrying out industry & market research, tracking latest developments, innovations, trends and investment activities, adds unique value to its business and helps it stand out from its competitors. Its clients have lauded its services on many occasions and continue to do so owing to its strong research capabilities. Its team always update themselves with the avant-garde technologies deliver the best and maintain the market standards. It strives on being constricted and persistent on expertise.

Risks and concerns

Revenue from operations is dependent upon top five clients: Its revenue from operations of its top five clients for the FY 2022-23, 2021-22 and 2020-21 was Rs 2815.94 lakh, Rs 1493.98 lakh and Rs 1234.43 lakh, respectively, which represented 80.39%, 67.96% and 77.30% of its revenue from operations for the same periods based on restated financial statements. Since it is significantly dependent on certain key clients for a significant portion of its revenue, the loss of any one of its key clients for any reason (including, due to failure to negotiate acceptable terms, disputes with clients, adverse change in the financial condition of such clients, reduced or delayed clients requirements, or other reasons), could have an adverse effect on its business, results of operations and financial condition. While it strives to maintain good relations with its key clients, there is no assurance that its key clients will continue to place similar demands of services with it in the future.

Highly dependent on key personnel: It is dependent on the services of its executive officers and other members of its senior management team. The loss of one or more of these key employees or any other member of its senior management team could have a material adverse effect on its business. It may not be able to retain or replace these key employees and may not have adequate succession plans in place. In particular, the company is managed by its promoter, Mr. Gaurav Munjal and various other key management personnel. Any situations impinging on their ability to function or their departure from its business may adversely affect its business performance.

Highly competitive businesses: It competes with a range of organized and unorganized competitors, depending on the nature and location of services provided. Unlike most of its competitors, it has a portfolio of businesses and must allocate resources across these businesses while competing against players focused on one or more businesses or service lines. As a result, its competitors may have greater financial, technical and marketing resources available to them than its businesses that compete against them. Industry consolidation also may affect competition by creating larger, more homogeneous and potentially stronger competitors in the markets in which it compete. Its competitors also may affect its business by entering into exclusive arrangements with existing or potential clients. There can be no assurance that it will be able to compete successfully against such competitors or that it will not lose its key employees or clients to such competitors.

Outlook

Infollion Research Services is a B2B marketplace. They are operating in the B2B Human Cloud segment, catering to on-demand contingent hiring of subject matter experts. They provide a platform for workers or knowledge providers (gig workers) and employers or knowledge seekers to connect with each other. On the concern side, it is significantly dependent on certain key clients for a significant portion of its revenue, the loss of any one of its key clients for any reason, could has an adverse effect on its business. Moreover, it is dependent on the services of its executive officers and other members of its senior management team. The loss of one or more of these key employees or any other member of its senior management team could have a material adverse effect on its business. 

The company is coming out with an IPO of 26,16,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 80-82 per equity share. The aggregate size of the offer is around Rs 20.93 crore to Rs 21.45 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased to Rs 3503.09 lakh in 2022-23 as against Rs 2,198.46 lakh in 2021-22. This increase was primarily driven from sales of services includes B2B Human cloud Segment, catering to on-demand contingent hiring and work arrangements with senior management talent, subject matter experts, and high-ranking, seasoned professionals. The company’s profit after tax increased by 38.94% to Rs 557.92 lakh in 2022-23 as compared to Rs 340.66 lakh in 2021-22, due to increase in total income.