What you must know about Yudiz Solutions IPO

Yudiz Solutions Ltd, is an SME IPO on the NSE which is opening for subscription on 04th August 2023. The company, Yudiz Solutions Ltd, was incorporated in the year 2012 to IT solutions and consultancy services. It is not just positioned as a technology services company but also as a digital transformation company. Its areas of operations include mobile app development, game development, Blockchain, AR/VR web development, apart from the regular activities like website development, ecommerce set up, and portal development for the clients. Its blockchain and game app development businesses  are the most robust of the verticals it operates in.

Yudiz Solutions Ltd offers the array of IT solutions in Mobile, Web, AR/VR, UI/UX and IoT through integrating trending technologies. Its various platforms include News Platform, E-commerce Bidding Platform, On-Demand Services Platform, VR Training platform, Upskilling Industry specific VR platform, HR Intelligence platforms and many more. The company brings some advantages to the table like domain expertise, skilled team, an integrated one-stop solution offering and low attrition rates ensuring that there is continuity in its solution offerings. The fresh funds will be used by the company for acquisitions, new product development, networking, and brand building. Being in the knowledge industry, much of the outlay would be into intangibles.

Key terms of Yudiz Solutions IPO SME

Here are some of the highlights of the Yudiz Solutions IPO on the SME segment of the National Stock Exchange (NSE).

• The issue opens for subscription on 04th August 2023 and closes for subscription on 08th August 2023; both days inclusive.
   
• The company has a face value of ₹10 per share it will be a book built issue. However, the issue price band for the IPO is yet to be fixed and is expected shortly.
   
• The fresh issue of the company will entail the issue of 27.176 lakh shares at a price band that is yet to be determined. Based on the price band, the size of the issue will be determined at the upper end of the price band of the book built IPO.
   
• The public issue only has a fresh issue component so the issue of 27.176 lakh shares also constitutes the total size of the IPO. There is no offer for sale component in the IPO hence the entire issue of shares here would be EPS and capital dilutive.
   
• The minimum lot size for the IPO investment will be 800 shares. Thus, retail investors can invest in the IPO only in minimum lots of 800 shares and in multiples thereof. That is also the maximum that the retail investors can invest in the IPO.
   
• HNI / NII investors can invest a minimum of 2 lots comprising of 1,600 shares and the minimum lot value will finally depend on the price band decided. There is no upper limit on what the HNI / NII investors can apply for.
   
• Like every SME IPO, this issue also has a marketing making portion with a market maker portion allocation of 1,36,800 shares. Kantilal Chhaganlal Securities Ltd will act as the market maker to the issue providing two-way quotes to ensure liquidity on the counter.
   
• The company has been promoted by Bharat Patel, Chirag Leuva and Bhaskarbhai Patel. The promoter stake in the company stands currently at 100.00%. Post the IPO, being a fresh issue of shares, the promoter stake will be get diluted to 73.66%.
   
• Narnolia Financial Services Ltd will be the lead manager to the issue while MAS Services Limited will be the registrar to the issue. Post the IPO, the total share capital of the company will go up from 76.02 lakh shares to 103.19 lakh shares.

The company has allocated 50% of the issue size for the QIBs, 35% for the retail investor while the balance 15% is allocated to HNI / NII investors. The table below captures the gist of the quota allocation.

Key dates to be aware of Yudiz Solutions IPO (SME)

Yudiz Solutions IPO opens on Friday, August 04th, 2023 and closes on Tuesday August 08th, 2023. The Yudiz Solutions Ltd IPO bid date is from August 04th, 2023 10.00 AM to August 08th, 2023 5.00 PM. The Cut-off time for UPI Mandate confirmation is 5 PM on the issue closing day; which is August 04th, 2023.

It must be noted that in ASBA applications, there is no refund concept. The total application amount is blocked under the ASBA (applications supported by blocked amounts) system. Once the allotment is finalized, only the amount is debited to the extent of the allotment made and the lien on the balance amount is automatically released in the bank account.

Financial highlights of Yudiz Solution Ltd

The table below captures the key financials of Yudiz Solutions Ltd for the last 3 completed financial years.

Data Source: Company DRHP filed with SEBI

Check Yudiz Solutions IPO GMP

The company has shown steady growth in sales and profits are getting close to the 10% net profit margin levels. The return on equity or ROE is also at around 25% levels in the latest year which should support mor aggressive valuations for the company. However, the biggest advantage is the cutting edge positioning of the business model that the company operates in.

The focus on upcoming areas like blockchain gives the company huge potential to grow as well as sustain margins for a much longer period at higher levels. Its weighted average EPS for the last 3 years stands at ₹4.56. The industry has average P/E in excess of 40X, so the potential for the stock does look good, although it would be for investors with a longer term perspective and higher risk appetite.