RK Swamy IPO - Investment Rationale, Issue Details, Financials, Key Strategies, Risks And More: Anand Rathi

Anand Rathi Report

RK Swamy Ltd. will launch its initial public offering tomorrow and the offer will be concluded on March 06. The Integrated marketing services firm has fixed a price band of Rs 270-288 per share. The minimum order lot is 50.

The Rs 423.6 crore IPO comprises fresh issue of up to Rs 173 crore, with offer-for-sale worth Rs 250.6 crore.

Object of the fresh issue

• Funding working capital requirements of the company.

• Funding capital expenditure to be incurred by the company.

• Funding investment in IT infrastructure development of the company.

• Funding setting up of new customer experience centres and CATI.

• General corporate purposes.

Valuation

The organization stands as a prominent integrated marketing service group in India, providing a comprehensive solution encompassing creative, media, data analytics, and market research services under one roof.

Over the past five decades, they have achieved organic growth by adeptly responding to market trends and evolving client needs. Additionally, the company boasts a 15-year track record in the data analytics and marketing technology sector.

They demonstrate a proven capability to generate digital content at scale, establishing themselves as leaders in the field of market research.

At the upper price band company is valued at price/earnings ratio of 46.5 of its FY23 earnings with a market cap of Rs 1453.4 crore post issue of equity shares and return on net worth of 22.2%.

We believe that valuations of the company is fairly priced and recommend a “Subscribe-Long Term” rating to the IPO.

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