Unicommerce Esolutions IPO - Investment Rationale, Financials, Peer Comparison, Risks And More: IDBI Capital

IDBI Capital Report

Unicommerce eSolutions launched its initial public offering today and the issue will close on Aug. 8. The SaaS solutions company has set a price band of Rs 102 to Rs 108 per share. The minimum lot size for bidding will be 138 shares and in multiples thereafter.

The issue is entirely an offer for sale of up to 2.56 crore equity shares.

Key Investment Rationale

Growing demand of Saas platforms:

The Indian retail market is expected to reach US$1.3-1.4 trillion by 2027. This growth creates opportunities for SaaS providers. The Indian SaaS market was $12 billion in FY2023. It is projected to grow at 33% annually, reaching $38 billion by FY2027.

The e-Commerce enablement SaaS industry has a promising outlook. E-Commerce is expected to grow at 23% annually until 2027. It may reach $140 billion in India.

Strengths of the company:

The company’s proprietary technology platform provides high scalability and adaptability across industries. It can handle peak volumes of over five million daily order items while maintaining efficiency, data security, and concurrency for client’s operations.

Improvement in the product i.e.; the platform can help the company’s brand value to increase. However, other companies with an opportunity to enter this market can hinder their margins based on the strategy that the company implements.

About the company

Unicommerce Esolutions is an enabler of Software-as-a-Service platform in the transaction processing, end-to-end management of E-commerce operations for brands, sellers and logistics service providers. geographically, company has its presence in India (96.32%) and rest of the world (3.67%).

The company serves a wide range of clients, from small businesses (2830) to large enterprises (743), across various sectors like fashion, electronics, and FMCG.

As of March 2024, company processed around 772 million items annually. Annual transaction run-rate is 763.82 million with annual recurring revenue of Rs1,037.41mn and company operates in 8159 warehouses and 1902 stores.

In FY24, co. reported revenue of Rs 1,035.8 million up by 15% YoY and PAT of Rs 130.7 million up by 102% YoY. It is the only profitable company among the top five players in this industry in India during Fiscal 2023.

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