Brief Summary
This YouTube video by Sunday Investing gives a rundown of three upcoming IPOs: Gallard Steel (SME), Capillary Technologies (Mainboard), and Excelsoft Technologies (Mainboard). The presenters share key details about each company's business, financials, growth potential, and risks, offering their perspectives on whether to invest.
- Gallard Steel: Manufacturing of engineered steel castings, primarily for Indian Railways.
- Capillary Technologies: A SaaS company specializing in customer loyalty and engagement solutions.
- Excelsoft Technologies: A global vertical SaaS company specializing in the learning and assessment market.
Opening Remarks
The video starts with a welcome to the Family Market chapter by Sunday Investing, focusing on the November 3rd week IPOs. They apologize for missing Fugama due to a scheduling conflict, similar to missing Finn Buddha last time. The chapter will cover three IPOs: Gallard Steel (SME), Capillary Technologies (Mainboard), and Excelsoft Technologies (Mainboard). The presenters clarify they are not SEBI registered and advise viewers to conduct their own research, emphasizing that their discussion is for informational purposes only. They encourage viewers to ask questions in the chat box and to follow their YouTube and Instagram channels.
Gallard Steel (SME)
Gallard Steel, incorporated in 2015, manufactures engineered steel castings for industries like Indian Railways and power generation. The IPO is a fresh issue of ₹37 crores, valuing the company at a market cap of ₹143 crores, resulting in a minimum dilution of 26.5%. In FY25, the company had a revenue of ₹54 crores and a profit margin of around 10-11%. Railways contribute 70-80% to their revenue, with defense at 3-4% and power generation at 1-2%. The company is an RDSO-approved vendor for some railway components, giving them an advantage. Steel prices are a risk, but they have price variation clauses in most contracts. The IPO funds will be used for capex (₹20 crores) to enhance capacity, debt repayment (₹7 crores), and general corporate purposes. The pricing is around 23 times FY25 earnings, potentially 14-15 times FY26 earnings.
Capillary Technologies (Mainboard)
Capillary Technologies, founded in 2008, is an Indian SaaS company specializing in customer loyalty and engagement solutions. The IPO is ₹880 crores, with ₹350 crores fresh issue and ₹530 crores OFS, valuing the company at ₹4,500 crores. FY25 financials show ₹611 crores in revenue and ₹14 crores in profit. The company powers loyalty programs for large brands like Indigo and Tata Neu. They have expanded globally, with 50% of their business in the US and 15-20% in Europe. They also serve various verticals like fuel (Shell) and B2B (Pidilite, Polycab). The company acquires businesses in new geographies to gain customer base and transition them to their product. They have sticky, large enterprise clients with minimal churn (5-7% annually) and high revenue retention (115%). The company is not currently profitable, but generates cash. The IPO is priced at 6.6-6.7 times trailing sales.
Excelsoft Technologies (Mainboard)
Excelsoft Technologies, founded in 2000, is a global vertical SaaS company specializing in the learning and assessment market. The IPO is ₹500 crores, with ₹180 crores fresh issue and ₹320 crores OFS, valuing the company at ₹1380 crores. FY25 revenue was ₹250 crores with a bottom line of ₹35 crores. Their solutions are used by organizations like Chartered Quality Institute, Pearson Group, Harvard, Oxford, and UNESCO. Key products include SUS (learning management system), Enable (learning experience platform), Open Page (digital interactive book system), Easy Proctor (AI-based remote proctoring), College Spark (student success platform), and Learn Active (K12 learning solutions). The fresh issue funds will be used for a new facility in Mysore (₹62 crores), capex for IT product upgrades (₹40 crores), IT infrastructure upgrades (₹55 crores), and GCP (₹23 crores). The company has strong EBITDA margins (around 31% in FY25) and generates cash. The IPO is valued at around 40 times PE and 18 times EV/EBITDA for FY25.
Closing Remarks
The presenters wrap up by summarizing the three IPOs and highlighting their unique characteristics. They reiterate the importance of doing independent research and not relying solely on their opinions. They emphasize that their analysis is unbiased by GMP (Grey Market Premium). They thank the viewers for joining and encourage them to follow their YouTube and Instagram channels for more IPO reviews.
