Vinsys IT Services coming with an IPO to raise upto Rs 49.84 crore

Vinsys IT Services 

• Vinsys IT Services is coming out with a 100% book building; initial public offering (IPO) of 38,94,000 shares of Rs 10 each in a price band Rs 121-128 per equity share.
• The issue will open for subscription on August 1, 2023 and will close on August 4, 2023.
• The shares will be listed on NSE Emerge.
• The face value of the share is Rs 10 and is priced 12.10 times of its face value on the lower side and 12.80 times on the higher side.
• Book running lead manager to the issue is Beeline Capital Advisors.
• Compliance Officer for the issue is Gayatree Neeraj Karandikar.

Profile of the company

Incorporated in 2008, Vinsys IT Services India is a part of Vinsys Group, headquartered in Pune, Maharashtra. Since inception, Vinsys Group has been dedicated to IT skill development, trainings and certification. The group comprise of 8 business entities, having its footprints in India, USA and Middle Eastern Countries. The company is engaged in IT business. Its core competence includes Training and Certifications, Digital Learning, Project Management, and technology training. Vinsys IT, an ISO 9001:2015 certified organization, is dedicated to becoming an accredited training service provider to meet the growing demand for training and workforce development. Vinsys specializes in corporate training and consulting across a broad range of domains. Its certifications of CMMIDEV/3 and ISO 27001: 2013 demonstrate its adherence to strict quality control standards.

The company is a trusted partner with CompTIA, Hybris Software, EC-Council, Red Hat, Oracle, CISCO, IBM, PECB, Autodesk, Skillsoft, AWS, PMI, PRINCE2, ISACA, ITIL, PeopleCert, Citrix and Microsoft in more than 30 countries, with a strong presence in India, USA, UAE. The company also has footprints by delivering services in Saudi Arabia, Oman, Qatar, Australia, Kenya, Tanzania, Singapore, and Malaysia.  In addition to certifications and training offerings, the company provides a comprehensive end to end solution by delivering robust and advanced digital learning solutions. Its OTS library of over 100,000 titles is compatible with all LMS and LXP platforms. Its advanced IT development services offer a seamless project execution process and a successful IT strategy. Its full suite of software service offerings includes ERP solutions, DevOps practices, architectural consulting, integration, and middleware services. The company also helps organizations reduce geographical diversity through its foreign language translation services. It caters to professionals across all industries and domains and offer assistance to organizations in formulating their learning and development strategies. Its organization, with its unwavering focus on quality, stands as a pioneer in the realm of training and development. Its dedication lies in offering, its clients with the best possible service, with trainers available on demand around the clock.

Proceed is being used for:

• Meeting Working Capital Requirements.
• Repayment of loan to Subsidiary.
• Loan to Subsidiary.
• General Corporate Purposes.
• Meeting Public Issue Expenses.

Industry overview

The IT industry accounted for 7.4% of India’s GDP, as of FY22. India’s IT industry is expected to contribute 10% to India’s GDP by 2025. As of FY22, the IT industry employs 5 million people. According to National Association of Software and Service Companies (Nasscom), the Indian IT industry’s revenue touched $ 227 billion in FY22, a 15.5% YoY growth. As per a survey by Amazon Web Services (2021), India is expected to have nine times more digitally skilled workers by 2025. This indicates that a total of 3.9 billion digital skill trainings are expected by 2025. As of 2021, digitally trained employees constitute 12% of the country's workforce. Exports from the Indian services industry stood at $ 254.4 billion in FY22. The BPM sector in India currently employs >1.4 million people, while IT and BPM together have 4.5 million workers, as of FY21. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth $ 88.94 billion between April 2000-June 2022. 

The sector ranked 2nd in FDI inflows as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Computer software and hardware make up 14.70% of the cumulative FDI equity inflows. 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. The IT industry added 4.45 lakh new employees in FY22, bringing the total employment in the sector to 50 lakh employees. The IT-BPM services revenue reached $ 194 billion in FY21. By 2025–2026, India is expected to have 60–65 million jobs that require digital skills, according to a Ministry of Electronics & IT report titled ‘India's trillion-dollar digital opportunity’. Exports from the Indian IT industry are expected to be around $ 178 billion in FY22.

Pros and strengths

Wide range of Service Portfolio: The company along with its subsidiaries offers wide arrey of services to the clients. It strives to provide one roof solutions to any corporate, engaged with it. The company provides 326 courses under training and certifications across 17 domains. In addition to certifications and training offerings, it provides a comprehensive end to end solution by delivering robust and advanced digital learning solutions. Its OTS library of over 100,000 titles is compatible with all LMS and LXP platforms. Its advanced IT development services offer a seamless project execution process and a successful IT strategy. Its full suite of software service offerings includes ERP solutions, DevOps practices, architectural consulting, integration, and middleware services. It also helps organizations reduce geographical diversity through its foreign language translation services.

Global Presence: Vinsys group has a global presence, providing training services in various countries worldwide. It understands the nuances of different cultures and tailor its training programs to meet local requirements. It is a trusted partner with CompTIA, Hybris Software, EC-Council, Red Hat, Oracle, CISCO, IBM, PECB, Autodesk, Skillsoft, AWS, PMI, PRINCE2, ISACA, ITIL, PeopleCert, Citrix and Microsoft in more than 30 countries, with a strong presence in India, USA, UAE and Strong delivery experience in Saudi Arabia, Oman, Qatar, Australia, Kenya, Tanzania, Singapore, and Malaysia.

Quality assurance: Vinsys IT, an ISO 9001:2015 certified organization, is dedicated to becoming an accredited training service provider to meet the growing demand for training and workforce development. Vinsys specializes in corporate training and consulting across a broad range of domains. Its certifications of CMMIDEV/3 and ISO 27001 demonstrate its adherence to strict quality control standards. 

Risks and concerns

Dependent on few numbers of customers: The company’s business operations are highly dependent on its customers and the loss of any of its customers may adversely affect its sales and consequently on its business and results of operations. While its typically have long term relationships with its customers, it has not entered into long term agreements with its customers and the success of its business is accordingly significantly dependent on it maintaining good relationships with its customers. The actual sales by the company may differ from the estimates of its management due to the absence of long-term agreements. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows. It cannot assure that it will be able to maintain historic levels of business and/or negotiate and execute long term contracts on terms that are commercially viable with its significant customers or that it will be able to significantly reduce customer concentration in the future. 

Highly dependent on technology: The company relies on its information technology systems to provide it with connectivity across its business functions and connectivity with its trainers and end users through its software, hardware and network systems. Its business processes are majorly information technology enabled, and any failure in its information technology systems or loss of connectivity or any loss of data arising from such failure could disrupt its ability to track, record and analyze work in progress, monitor maintenance activities or share data with its network partners, process financial information, manage creditors/debtors or engage in normal business activities, which could have an adverse effect on its business and operations. Further, any failure, disruption or manipulation of its integrated information technology system could disrupt its ability to track and record transactions, which could have an adverse effect on its business and operations.

Requires significant amount of working capital: The company’s business requires significant working capital, part of which would be met through additional borrowings in the future. Its working capital requirements may increase under certain conditions, where payment terms do not include advance payments or include delayed payments from customers. Additionally, its working capital requirements have increased in recent years due to the general growth of its business. All these factors may result, or have resulted, in increases in its working capital needs.

Outlook 

Incorporated in 2008, Vinsys IT Services India is engaged in offering services in IT skill development, trainings, and certification domain. The company is a part of Vinsys Group. As of now, the group comprises 8 entities operating in India, as well as having a marked global footprint in the USA and Middle Eastern Countries. The strength and entrepreneurial vision of the company’s Promoters and management have been instrumental in driving steady growth of the company and implementing its strategies. The business of the company is customer oriented and always strives to maintain good relationship with the corporates. Leveraging its market skills and relationships is a continuous process in its organization and the skills that it imparts in its people give importance to customers. On the concern side, the company requires several statutory and regulatory permits, licenses and approvals to operate the business. Many of these approvals are granted for fixed periods of time and need renewal from time to time. The company is required to renew such permits, licenses and approvals. There can be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all. 

The issue has been offered in a price band of Rs 121-128 per equity share. The aggregate size of the offer is Rs 47.11 crore to Rs 49.84 crore based on lower and upper price band respectively. On performance front, the revenue from operations for the FY 2022-23 was Rs 9485.01 lakh as compared to Rs 3184.72 lakh during the FY 2021-22 showing an increase of 197.83%. The company has reported Profit after Tax (PAT) of Rs 1511.50 lakh in FY 2022-23 as compared to net loss of Rs 32.39 lakh in the FY 2021-22. Meanwhile, the company intends to continue to grow geographical presence by increasing its reach to unexplored geographies. It also intends to continue to enhance scale in existing services across high end and mid segment to capitalize on the opportunity to cater rising acceptance and demand. Its wide service portfolio provides it competitive edge over its competitors. In order to maintain its competitive edge, it will continue to keep providing quality services.