Sattrix Information Security coming with IPO to raise Rs 21.78 crore

Sattrix Information Security

• Sattrix Information Security is coming out with an initial public offering (IPO) of 18,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 121 per equity share. 
• The issue will open for subscription on June 5, 2024 and will close on June 7, 2024.
• The shares will be listed on BSE SME Platform.
• The share is priced at 12.10 times higher to its face value of Rs 10.
• Book running lead manager to the issue is ISK Advisors.
• Compliance Officer for the issue is Rina Kumari.

Profile of the company

Sattrix Information Security is in the business to develop customer-centric cyber security solutions, it aims to deliver end-to-end cybersecurity services to enterprises in the India, USA and Middle East (UAE). With a decade of experience, the company has established itself as a trusted partner in providing a comprehensive range of cyber security solutions. It helps organizations to protect their data from unauthorized access against and protect against security threats. Its data security solutions aim to eliminate data privacy risks to make business processes secure and run smoothly. It designs and builds data security solutions on cloud and on premise based on the client requirement. It uses best available technologies to develop cyber security solution, and its aim is to develop agile cyber security solution which helps in constant upgrade and its solutions adopt to the changing requirement of the client.

The company offers Managed Security Services, Assessments & Advisory, and Professional Services tailored to customer's needs. The expert team of the company provides monitoring, proactive threat detection, and rapid response. From vulnerability assessments to incident response, the company has niche services offerings in cyber security domain. The company’s objective is to safeguard customer's organization against evolving cyber threats. Its promoters Sachhin Kishorbhai Gajjaer and Ronak Sachin Gajjar are the key driving force behind its business. It values its Human resource as it understands that the skill of its employees is the vital resource to excel in its cyber security business.

Proceed is being used for:

Capital Expenditure

• Meeting out expenses for Purchasing Furniture, fixture & air conditioning for new office at Ahmedabad 
• Purchase and Installation of IT equipment, computer hardware, server, SAN storage, CCTV cameras, video conferencing equipment, networking (LAN) and other equipment 

Business Expansion Cost

• Development of New Product & Technology 
• Other Business Expansion Cost

General Corporate Purpose

Industry overview

The Global Cyber Security Market size is projected to grow from $190.4 billion in 2023 to $298.5 billion by 2028 at an annual growth rate (CAGR) of 9.4% during the forecast period. Revenue in the Indian Cybersecurity market is projected to reach $2.90 billion in 2024. Cyber Solutions dominate the market with a projected market volume of $1.51 billion in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 13.31%, resulting in a market volume of $4.78 billion by 2028. In global comparison, most revenue will be generated in the United States $78,310.0 million in 2024.

The rise in malware and phishing threats among enterprises, the increased adoption of Internet Of Things (IoT), and the BYOD trend propel the cyber security market forward. Also, the increased demand for cloud-based cybersecurity solutions positively impacts market growth. Increased adoption of mobile device applications and platforms, the need for strong authentication methods, and transformation in the traditional antivirus software industry are expected to provide lucrative opportunities for market expansion during the forecast period. 

The demand for Security Information and Event Management (SIEM) technology and services has increased due to the rise in cyber-attacks and data breaches across the country. SIEM technology and services gather real-time security events from various data sources and events to identify threats and produce responses to security incidents. Large corporations used to focus their efforts on risk avoidance. Cybersecurity requirements are growing faster than the budgets allocated to meet them. Most small businesses need more money and IT security expertise to implement enhanced cybersecurity solutions to protect their networks and IT infrastructures from various cyber-attacks. Limited capital funding can impede some small and medium-sized businesses from embracing the cybersecurity model.

Pros and strengths

Diversified client base: Its reach and presence in the industry can be comprehended by looking at its distinguished list of clienteles. They have been dealing in their respected disciplines from years and it is honoured having considered by them as their technical solution providers throughout. Its clients are spread across wide variety of sectors. Its strategy is to seek new customers and at the same time secure additional engagements from existing customers by providing timely and improved services.

Geographical presence in growing markets: By strategically leveraging a strong geographical presence in the growing markets of the Middle East and North America, Sattrix has Extensive knowledge of the Middle East and North America markets, including regulatory landscapes, cultural nuances, and economic trends. Sattrix aims to drive sustainable business growth, forge valuable partnerships, and position the organization as a key player in these dynamic and expanding regions.

Qualified and experienced promoters & employees: Its Promoter have substantial experience in IT industry of approximately a decade. The company is managed by a team of experienced and professional personnel, exclusively focused on different aspects of the industry. The team is comprised of personnel having operational experience and they are capable of creating and facing the challenges of growth within the company.

Risks and concerns

Dependent on a few customers: It has established and will continue to focus on strengthening long-standing relationships with its customers across the end-use industries that it caters to. However, it depends on certain customers who have contributed a substantial portion of its total revenue from operations. There is no guarantee that it will retain the business of its existing key customers or maintain the current level of business with each of these customers. The loss of these customers or a loss of revenue from sales to these customers may materially affect its business, financial condition, results of operations and cash flow.

Delays and/or defaults in client payments: The company in its usual course of business charges 10-25% of the total project cost as advance fees/ upfront fees. Further, the company also generates intermediate invoices at different stages on a milestone basis of the project which the clients have to honor. Considering the same, it might be exposed to payment delays and/or defaults by its clients. Its financial position and financial performance is dependent on the creditworthiness of its clients. It cannot assure that payments from all or any of its clients will be received in a timely manner or to that extent will be received at all. If a client defaults in making its payments on an order or project on which the Company has devoted significant resources, or if an order or project in which the Company has invested significant resources is delayed, cancelled or does not proceed to completion, it could have a material adverse effect on the Company’s results of operations and financial condition.

Operate in an evolving industry: The technology services industry is competitive and continuously evolving, subject to rapidly changing demands and constant technological developments. As a result, success and performance metrics are difficult to predict and measure in its industry. As services and technologies are rapidly evolving and each company within the industry can vary greatly in terms of the services it provides, its business model, and its results of operations, it can be difficult to predict how any company’s services, including its, will be received in the market. While businesses have been incurring significant expenditure in the past to adopt emerging technologies and related technological trends, there can be no assurance that they will continue to do so in the future.

Outlook

Sattrix Information Security is in the business to develop customer-centric cybersecurity solutions to protect customers from cyber-attacks. The company offers Managed Security Services, Assessments & Advisory, and Professional Services tailored to customer's needs. The expert team of the company provides monitoring, proactive threat detection, and rapid response. From vulnerability assessments to incident response, the company has niche services offerings in cyber security domain. On the concern side, the industry in which the Company operates is highly competitive in nature, and it expects competition to increase in the future from established competitors as well as new market entrants. These companies may have significant recognition, substantial resources and existing infrastructures and powerful economies of scale and scope, which allow them to rapidly develop and deploy new solutions. Many of its existing competitors have, and some of its potential competitors could have, substantial competitive advantages.

The company is coming out with an IPO of 18,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 121 per equity share to mobilize Rs 21.78 crore. On performance front, its total income/Revenue is increased by 10.78% from Rs 2120.23 lakh in FY 2021-22 to Rs 2348.69 lakh in FY 2022-23, primarily due to an increase in its revenue from operations. Profit after Tax had increased by 10.47%, from Rs 193.83 lakh in Fiscal 2021 to Rs 214.13 lakh in Fiscal 2022. Meanwhile, Information technology, artificial intelligence and use of IT services is increasing globally at very fast speed & therefore, IT security and cyber security is likely to have multifold growth which will offer good opportunity for optimum utilization of its capabilities & optimize the profit. Business in India is growing and it is also increasing its business in USA & UAE to cover gulf region. Its present set up is expected to give fast growth of business in USA & gulf region.