Esconet Technologies
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 16 Feb 2024 – 20 Feb 2024
- Listing date
- 23 Feb 2024
- Face value
- ₹10 per share
- Issue price
- ₹84 per share
- Lot size
- 1,600 shares
- Issue type
- Book Building issue
- Total issue size
- ₹28.22 Cr
- Market cap at offer price
- ₹104 Cr
- Promoter holding
- 89.18% → 64.94% pre-issue → post-issue
- ISIN
- INE0RQZ01017
- Registrar
- Skyline Financial Services Pvt.Ltd.
- Lead managers
- Corporate Capitalventures Pvt.Ltd.
- Registered office
- D-147, Okhla Industrial Area, Phase 1, New Delhi
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 9,53,600 | — | — |
| Market maker | 1,76,000 | — | — |
Application size
Minimum 1,600 shares per lot, in multiples, at ₹84
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,600 | ₹1,34,400 |
| S-HNI (min) | 2 | 3,200 | ₹2,68,800 |
| S-HNI (max) | 7 | 11,200 | ₹9,40,800 |
| B-HNI (min) | 8 | 12,800 | ₹10,75,200 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 39.63 | 4.94 |
| P/E (×) | 2.12 | 17.00 |
| Price to book (×) | 1.16 | — |
| Market cap | — | ₹104 Cr |
Key performance indicators
- Return on net worth
- 54.83%
- ROCE
- 59.11%
- Debt / equity
- 1.99
- PAT margin
- 3.21%
- NAV per share
- ₹23.22
- Price to book
- 1.16
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Esconet Technologies
Esconet Technologies Limited, founded in 2012 and incorporated on March 30, 2012, was converted from a Private Limited Company to a Public Limited Company on September 21, 2023. The company meets a wide range of IT requirements including high-performance supercomputing solutions, data centre facilities encompassing storage servers, network security, virtualization, and data protection. It serves SMEs, large enterprises, and public sector clients through its comprehensive solutions. The company extends its capabilities into the cloud services domain through its wholly owned subsidiary, ZeaCloud Services. Esconet has established a significant client base including Ministry of Defence, National Informatics Centre-MeitY, Indian Institute of Technology, and other government and private sector organizations. The company introduced its HexaData brand specializing in high-performance Servers, Workstations, and storage systems, and has a strategic collaboration with NVIDIA to enhance its offerings in Artificial Intelligence and Machine Learning domains.
Company Analysis
from RHPEsconet Technologies Limited is an IT solutions provider offering high-performance supercomputing solutions, data centre facilities, storage servers, network security, virtualization, data protection, and cloud services to SMEs, large enterprises, and public sector clients.
Esconet Technologies Limited, founded in 2012 and incorporated on March 30, 2012, was converted from a Private Limited Company to a Public Limited Company on September 21, 2023. The company meets a wide range of IT requirements including high-performance supercomputing solutions, data centre facilities encompassing storage servers, network security, virtualization, and data protection. It serves SMEs, large enterprises, and public sector clients through its comprehensive solutions. The company extends its capabilities into the cloud services domain through its wholly owned subsidiary, ZeaCloud Services. Esconet has established a significant client base including Ministry of Defence, National Informatics Centre-MeitY, Indian Institute of Technology, and other government and private sector organizations. The company introduced its HexaData brand specializing in high-performance Servers, Workstations, and storage systems, and has a strategic collaboration with NVIDIA to enhance its offerings in Artificial Intelligence and Machine Learning domains.
Objects of the Issue
- Working Capital Requirements of the Company ₹1,600.00 Lakh p.20
- Investment in wholly owned subsidiary company, Zeacloud Services Private Limited, to fund its Capital Expenditure expenses ₹250.00 Lakh p.20
- General Corporate Purposes p.20
- Working capital requirement of our company Esconet Technologies Limited ₹1600.00 Lakhs p.75
- Investment in Wholly Owned Subsidiary, viz. "Zeacloud Services Private Limited", to fund its capital expenditure expenses. ₹250.00 Lakhs p.75
- General Corporate Expenses p.75
- Not stated in this section of the document (PART 3 focuses on product descriptions and does not contain Objects of the Offer)
Issue Structure
- Total Issue
- 33,60,000 Equity Shares aggregating to ₹[●] Lakhs
- Fresh Issue
- 33,60,000 Equity Shares aggregating to ₹[●] Lakhs
- Offer for Sale
- Nil
- Price Band
- ₹80.00 to ₹84.00 per Equity Share
- Lot Size
- 1600 Equity Shares and multiples thereof
- Face Value
- ₹10 per Equity Share
Business Model
The company earns revenue through providing IT solutions and services including supercomputing solutions, data centre facilities, storage servers, network security, virtualization, data protection services, and cloud services to SMEs, large enterprises, and public sector clients. Revenue is generated from operations through project-based engagements and service delivery contracts.
Business Segments
SWOT Analysis
- • Established client base including government and large enterprises(p.18)
- • Subsidiary company in cloud services (ZeaCloud) extends capability into cloud domain(p.18)
- • Strategic collaboration with NVIDIA in AI/ML domain(p.18)
- • Established relationships with high-end government and institutional clients(p.112)
- • Wholly-owned subsidiary (ZeaCloud) providing cloud services to expand service portfolio(p.112)
- • Strategic NVIDIA collaboration for AI/ML capabilities(p.112)
- • Comprehensive end-to-end IT solutions portfolio covering hardware, software, and services(p.112)
- • Strong recent financial performance with high profitability metrics(p.88)
- • Advanced supercomputer technology with cutting-edge GPU integration(p.117)
- • Experienced promoter and management team with 20+ years in IT industry(p.137)
- • Strategic partnerships with major technology leaders(p.137)
- • Strong and established customer relationships with repeat business(p.137)
- • Marquee government and PSU clients including ONGC, IIT, Ministry of Defence(p.137)
- • Multiple award recognition including ChannelWorld Premier100 and Intel Partner awards(p.135)
- • HexaData proprietary brand with high-performance server technology(p.159)
- • Established IT infrastructure and system integration business with diversified service portfolio(p.264)
- • Strategic collaboration with NVIDIA for AI and ML capabilities(p.264)
- • Proprietary HexaData brand for high-performance servers and workstations(p.264)
- • Demonstrated profitability with significant year-over-year revenue growth(p.269)
- • Comprehensive service capabilities spanning hardware, network, software, and tailor-made solutions(p.264)
- • High customer concentration—top 5 clients contribute 41.35% of FY23 revenues(p.28)
- • High supplier concentration—top 5 suppliers represent 53.15% of FY23 purchases(p.31)
- • Significant unsecured borrowings (₹671.62 Lakh) repayable on demand(p.30)
- • Company lacks Fire NOC for registered office, corporate office and warehouses(p.31)
- • Negative cash flows from operations in prior years(p.29)
- • Bank guarantees of ₹260.53 Lakhs expose company to default risk(p.28)
- • Delayed statutory compliance—late filings with RoC, GST, TDS, and EPFO(p.33)
- • Registered office is leased from promoter on monthly basis with limited tenure(p.30)
- • Related party transactions with promoters and no assurance of arm's length pricing(p.31)
- • High customer concentration with top 10 customers representing 50.68% of FY 2021-22 revenue(p.77)
- • Significant increase in working capital requirement straining cash flow(p.76)
- • High leverage with debt-to-equity ratio of 1.12 as of September 30, 2023(p.88)
- • ZeaCloud subsidiary operating at near-capacity with infrastructure constraints(p.80)
- • Promoters holding 89.18% pre-issue capital indicating concentrated shareholding(p.70)
- • Dependence on few major suppliers with top 3 suppliers contributing over 45% of purchases(p.142)
- • High dependence on few major customers with top customer at 15.64% of revenue(p.142)
- • Registered office owned by promoter creating potential conflict of interest(p.169)
- • Import dependence with 9.13% of purchases in first half of FY23 being imported(p.139)
- • High dependence on top 5 customers, with top 10 customers accounting for majority of revenue(p.273)
- • Significant financial indebtedness with debt-to-equity ratio of 1.13 as of September 30, 2023(p.260)
- • Related party borrowings of Rs. 158.45 Lakhs representing material unsecured debt(p.198)
- • Concentrated promoter shareholding at 85.75% as of September 30, 2023 limiting free float(p.197)
- • Working capital tied up significantly in inventories and receivables, with inventory increasing by 59.5% from March 2023 to September 2023(p.251)
- • Global supercomputer market projected to grow at 10.5% CAGR to $19B by 2033(p.18)
- • Global server market anticipated to reach $175.29B by 2030 at 9.3% CAGR(p.19)
- • Cloud system management market projected to grow from $2.34B (2023) to $5.59B (2032) at 11.50% CAGR(p.19)
- • India Server Market expanding at 7.19% CAGR with increased data centre investment(p.20)
- • Government data centre initiatives such as UP-Data Center Policy targeting INR 20,000 Crores investment(p.20)
- • Opportunity to attract new clients and diversify revenue base beyond current top 5 clients(p.28)
- • Rapid growth in Indian data center market with CAGR of 5.84% through 2027(p.106)
- • Cloud computing market in India expanding at 18.37% CAGR from USD 6.47 billion (2022) to USD 17.8 billion (2029)(p.109)
- • Growing demand for AI/ML infrastructure with significant government and enterprise investment(p.103)
- • 45 new data centers with 1,015 MW capacity scheduled by end of 2025 in India(p.106)
- • Government initiatives and policies supporting data center sector expansion(p.109)
- • Growing demand for AI and ML computing infrastructure(p.118)
- • Data Centre market growth driven by digital transformation and data explosion(p.151)
- • Government Make in India initiative supporting local server manufacturing(p.159)
- • Expansion of cloud services through wholly-owned subsidiary ZeaCloud(p.160)
- • Post-sales services focus as differentiator for customer retention(p.137)
- • Customized tailor-based solutions meeting diverse customer requirements(p.138)
- • Expansion of cloud computing and managed services through wholly-owned subsidiary Zeacloud Services(p.200)
- • Growing AI and ML market demand leveraging NVIDIA partnership and enhanced server capabilities(p.264)
- • Expansion into government and public sector IT procurement as top customer (NICSI) contributes 15.64% of FY23 revenue(p.269)
- • Growth in services revenue component which grew from Rs. 334.39 Lakhs in FY22 to Rs. 553.26 Lakhs in FY23(p.254)
- • Intense competition from large global consulting firms and offshore IT service providers(p.35)
- • Rapid technological obsolescence in fast-evolving IT industry(p.30)
- • Significant revenue concentration from government sector (35.75% in FY23)(p.29)
- • Cybersecurity threats including phishing, hacking, data theft, and advanced persistent threats(p.34)
- • Changes in government regulations and taxation policies affecting business operations and costs(p.39)
- • Political instability and changes in economic liberalization policies affecting India's economy(p.39)
- • Natural calamities and disasters impacting Indian economy and business operations(p.40)
- • Volatility in global and Indian capital markets affecting equity share price(p.40)
- • Global economic slowdown with IMF projecting 3.0% global growth in 2023-2024(p.97)
- • Indian GDP growth expected to slow to 6% in FY 2023-24 from 7.2% in FY 2022-23(p.99)
- • High inflation and restrictive monetary policy impacting business investment(p.99)
- • Intense competition in server and data center markets from established global players(p.105)
- • Rising cybersecurity threats and data protection risks necessitating increased compliance(p.106)
- • High dependence on imports for critical components including chassis and memory(p.128)
- • Foreign exchange volatility affecting import costs(p.128)
- • Intense competition from established global IT infrastructure players(p.118)
- • Regulatory compliance requirements including Data Protection Bill and IT Act(p.151)
- • Rapid technological obsolescence in computing hardware industry(p.117)
- • High competitive intensity in IT infrastructure and system integration sector affecting margins(p.273)
- • Business sensitivity to Indian economic conditions and government spending cycles(p.272)
- • Dependence on technology and potential disruption from system failures impacting operations(p.265)
- • Rising employee cost pressures as company seeks talent for emerging skills and capabilities(p.272)
- • Exposure to foreign exchange volatility given import of IT materials with CIF value of Rs. 538.24 Lakhs in H1 FY24(p.243)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Santosh Kumar Agrawal | Promoter | 47.07% | 34.27% |
| Sunil Kumar Agrawal | Promoter | 34.45% | 25.10% |
| Vineet Agrawal | Promoter | 0.98% | 0.72% |
| Santosh Kumar Agrawal | Promoter | 47.07% | 34.27% |
| Sunil Kumar Agrawal | Promoter | 34.45% | 25.09% |
| Vineet Agrawal | Promoter | 0.98% | 0.72% |
| Anil Kumar Agrawal | Promoter Group | 3.06% | 2.22% |
| Abha Agrawal | Promoter Group | 1.96% | 1.42% |
| Savitri Devi | Promoter Group | 1.22% | 0.89% |
| Santosh Kumar Agrawal | Promoter | 47.07% | — |
| Sunil Kumar Agrawal | Promoter | 34.45% | — |
| Vineet Agrawal | Promoter | 0.98% | — |
| Santosh Agrawal | Promoter | 49.51% | — |
| Sunil Agrawal | Promoter | 36.24% | — |
| SANTOSH KUMAR AGRAWAL | First Director | — | — |
| SUNIL KUMAR AGRAWAL | First Director | — | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.