Brisk Technovision
- Brisk Technovision is coming out with an initial public offering (IPO) of 8,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 156 per equity share.
- The issue will open on January 22, 2024 and will close on January 24, 2024.
- The shares will be listed on BSE SME Platform.
- The share is priced at 15.60 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Sun Capital Advisory Services.
- Compliance Officer for the issue is Shreyas Anil Haldankar.
Profile of the company
Brisk Technovision is engaged in the business of providing information technology solutions to corporate customers. The primary business of the company is (a) to provide various third party hardware products such as servers, desktops, personal computers and laptops as well as (b) third party software to Indian corporate customers. It also offers other service offerings, which includes services relating to design, supply and installation of data centres, enterprise networking management, email management, system integration and annual maintenance contract (AMC) for hardware and system maintenance, monitoring and managed services. In the last three financial years, the company has begun to focus on offering more of its service offerings. Presently, predominately its business (both Sales of Goods and Sales of Services) is in state of Maharashtra.
The company has business relations with several Original Equipment Manufacturers (OEMs) through which it is able to provide end-to-end services in setting up and managing IT infrastructure for organizations of all sizes across all industries. The company procures servers, laptops, desktops and other allied products from the OEMs as per the requirements of its client. The company’s capabilities include sourcing appropriate IT products, integrating the systems to work together as a unified solution, integrating the network that connects this infrastructure across different locations and managing the system to ensure high availability of IT storage, network and computing infrastructure. It also liaises with the relevant OEMs and connectivity providers so that the clients can focus on their core business while it takes care of their complete IT infrastructure requirement.
The integrated turnkey solutions are customized to address specific client requirements for their business outcome so that they derive maximum benefit from the investment they make in its IT systems. The cmpany’s track record of successfully delivering complex IT projects all over India gives its clients the confidence to depend on it for their turnkey systems and network integration and managed services requirements. The company’s systems integration expertise helps to implement and integrate proven, state-of-the-art technologies to achieve specific business objectives. The breadth and depth of its System Integration capabilities enables it to leverage IT investments, minimize risk and deliver complete system integration services and solutions addressed to unique business needs.
Proceed is being used for:
The objects of the offer are to (i) to undertake the Offer for Sale of up to 8,00,000 Equity Shares and (ii) achieve the benefit of listing the Equity Shares on the Stock Exchange.
Industry overview
The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.4% of India’s GDP in FY 2022, and it is expected to contribute 10% to India’s GDP by FY 2025. As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest internet rates, with 76 crore citizens now having access to the internet. The current emphasis is on production of significant economic value and citizen empowerment, thanks to a solid foundation of digital infrastructure and enhanced digital access provided by the Digital India Programme. India is one of the countries with the quickest pace of digital adoption. This was accomplished through a mix of government action, commercial innovation and investment, and new digital applications that are already improving and permeating a variety of activities and different forms of work, thus having a positive impact on the daily lives of citizens.
The Indian IT industry’s revenue touched $227 billion in FY 2022, a 15.5% YoY growth. Indian software product industry is expected to reach $100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery centres. The data annotation market in India stood at $250 million in FY 2020, of which the US market contributed 60% to the overall value. The market is expected to reach US$ 7 billion by 2030, due to accelerated domestic demand for AI. Exports from the Indian IT industry stood at $149 billion in FY 2021. 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 export accounted for 20.78% each to total IT exports during FY 21. The IT industry added 4.45 lakh new employees in FY 2022, bringing the total employment in the sector to 50 lakh 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. The Indian IT & business services industry is expected to grow to $19.93 billion by 2025. By 2026, widespread cloud utilisation can provide employment opportunities to 14 million people and add $380 billion to India's GDP. As per a survey by Amazon Web Services (2021), India is expected to have nine times more digitally skilled workers by 2025. In November 2021, Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, lauded the Indian IT sector for excelling its competitive strength with zero government interference. He further added that service exports from India has the potential to reach $1 trillion by 2030.
Pros and strengths
The company’s solutions are robust, trusted & Industry proven: The company’s business offerings provide a comprehensive range of solutions for Data Centers, Enterprises, pharma and banking industry sectors, wherein it provides complete solution ranging from hardware, software, services and support. It provides quality services as per its clients’ requirements. This helps it in attracting new clients and also gain recurring business from its existing or old clients.
Diverse range of hardware and software products across varied customer segments: The company provides an extensive range of IT Infrastructure solutions and third-party IT products and software. Since its inception, it has expanded its range of offerings which has enabled it to service new markets, new customers and also explore new product offerings to existing customers.
Cash rich company which has been making profit every year for more than a decade: The company is a cash rich company (having fixed deposits of Rs 425.35 lakh (against net worth of Rs 478.54 lakh as on March 31, 2023, as confirmed by the Statutory Auditors Gosar & Gosar, Chartered Accountants, vide their Certificate dated August 1, 2023). As on date of filing this Draft Prospectus, the company does not have any debt. The company has an asset light business model and has been making Profit After Tax in each year for more than a decade.
Risks and concerns
Maximum revenue comes from few clients: Its revenue is highly dependent on few customers. During the Fiscal 2023, Fiscal 2022 and Fiscal 2021, its top five customers accounted for 91.18%, 94.62%, and 95.31%, respectively, and its largest customer accounted for 42.33%, 51.09%, and 47.21% of its revenue from operations, respectively. Further, it does not have long-term contractual arrangements or any exclusive arrangements with its significant customers and conduct business with them on the basis of orders that are received from them time to time. The company cannot assure that it will be able to do the same or higher volume of business which it has historically have done with such customers. In the event its competitors’ products or services offer better terms to such customers, there can be no assurance that its customers will continue to place orders with it. Further, its customers may change their business practices or may ask for modified terms including in relation to their payment terms, could adversely affect its business revenue and results of operations.
Geographical constrain: Most of its business operations are in and from the state of Maharashtra. A natural calamity, economic slowdown or any disruption in Maharashtra may hinder it from conducting its business operations in Maharashtra, economically and otherwise. Due to such factors, the company may experience pronounced effects on its results of operations, financial condition and cash flows than if it were further diversified across different geographical locations. Though it has its online presence, which is not restricted to a particular geography, it is still largely dependent on the business that it operates in Maharashtra.
Dependent on a few suppliers for the third-party products: The company sources various hardware products such as servers, desktops, personal computers and laptops as well as third party software products which it provides to its customers from external suppliers. During the Fiscal 2023, Fiscal 2022 and Fiscal 2021, about 81.35%, 87.89% and 80.40% of its purchases are from its top five suppliers, respectively, and its largest supplier accounted for 27.59%, 42.36%, and 30.56% of its revenue from operations, respectively. It does not enter into any long- term contracts with its suppliers for supply of these products and prices for products are normally based on the quotes it receives from various suppliers. The failure of its suppliers to deliver these products in the necessary quantities, to adhere to delivery schedules or to meet specified quality standards or technical specifications, could adversely affect its ability to deliver orders on time to its customers.
Outlook
Brisk Technovision is a company that specializes in providing information technology solutions to corporate clients in India. The company's main focus is to offer third-party hardware products such as servers, desktops, personal computers, and laptops, as well as third-party software to Indian corporate customers. The company has been awarded two certifications: Quality Management System and IT-Infrastructure Management, Information Security Services, and Data Centre Management Services. These certifications are by ISO standards ISO 9001:2015 and 20000:2013, respectively. On the concern side, the company is dependent on a few customers for majority of its revenues and it also does not have any long-term arrangements with its customers, could adversely affect its business and results of operations. Moreover, most of its business operations are in and from the state of Maharashtra. Due to this geographic concentration of its business operations, its results of operations and growth might be restricted to the economic and demographic conditions of Maharashtra.
The company is coming out with an IPO of 8,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 156 per equity share to mobilize Rs 12.48 crore. On performance front, the company’s total income decreased by 16.64% from Rs 2,207.63 lakh in financial year ended March 31, 2022 to Rs 1,840.30 lakh in financial year ended March 31, 2023 primarily due to a decrease in revenue from Sale of Goods (i.e. from Rs. 1,629.12 Lakh in FY 2023 to Rs 990.07 lakh in FY 2022) which is a part of revenue from operations. Moreover, profit after tax for financial year 2022-23 has significantly increased to Rs 198.90 lakh as compared to Rs 109.54 lakh in the financial year 2021-22, representing an increase of 81.58%.
As part of its business strategy, the company focuses on attracting and retaining high quality talent as it continues to expand its service offerings. It expects to continue to attract talented employees through its retention initiatives. The company intends to invest adequate time and resources for training its employees, which would foster mutual trust, improve the quality of its customer service and place further emphasis on its continued retention. Going forward, the company intends to adopt an industry-wise focus which is also planned and aligned with geographical presence to further develop its business. The company is in the process of implementing few initiatives, including structuring its organization by way of industry verticals to accumulate relevant industry experience.
