Systango Technologies
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 02 Mar 2023 – 06 Mar 2023
- Listing date
- 15 Mar 2023
- Face value
- ₹10 per share
- Issue price
- ₹90 per share
- Lot size
- 1,600 shares
- Issue type
- Book Building issue
- Total issue size
- ₹34.82 Cr
- Market cap at offer price
- ₹132 Cr
- Promoter holding
- 97.73% → 71.96% pre-issue → post-issue
- ISIN
- INE0O7R01011
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Hem Securities Ltd.
- Registered office
- Third Floor (LHS), STP-I Crystal IT Park, Ring Road, Madhya Pradesh
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 | 10,99,200 | — | — |
| Market maker | 1,96,800 | — | — |
Application size
Minimum 1,600 shares per lot, in multiples, at ₹90
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,600 | ₹1,44,000 |
| S-HNI (min) | 2 | 3,200 | ₹2,88,000 |
| S-HNI (max) | 6 | 9,600 | ₹8,64,000 |
| B-HNI (min) | 7 | 11,200 | ₹10,08,000 |
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 (₹) | 6.59 | — |
| P/E (×) | 13.66 | — |
| Market cap | — | ₹132 Cr |
Key performance indicators
- Return on net worth
- 39.89%
- ROCE
- 47.62%
- Debt / equity
- 0.32
- PAT margin
- 21.78%
- EBITDA margin
- 22.78%
- NAV per share
- ₹16.53
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Systango Technologies
Systango Technologies Limited was originally incorporated as 'Bushcare Overseas Private Limited' on September 17, 2004, renamed 'Systematix Technocrates Private Limited' in 2006, 'Systango Technologies Private Limited' in 2016, and converted into a public limited company in December 2022. Headquartered in the Special Economic Zone at Crystal IT Park, Indore (which entitles it to SEZ tax benefits), the company provides end-to-end software solutions — full-cycle web and mobile app development (iOS/Android), Web3 and blockchain implementations (NFTs, DApps, DeFi, DAOs, smart contracts), data engineering and machine learning, DevOps, digital marketing, product architecture and design, cloud services, and continuous engineering/product support — enabling clients to design, implement and manage customized digital platforms with strong emphasis on data and analytics. Its clients range from entrepreneurs and start-ups to established companies across 10 countries, and revenue is primarily export-driven (94.12% of standalone turnover in H1-FY2023; 95.00% in FY2022), with the USA (~67-68%) and UK (~15-19%) the largest markets. Engagements are governed by master services agreements priced on a fixed-price/fixed-time or time-and-materials basis. Operations are supported by wholly owned subsidiaries Isystango Ltd (UK, acquired from the promoters in 2022 for Rs. 268.72 lakhs), Systango LLC (USA, incorporated 2020) and Systango Account Aggregator Services Private Limited. As of September 30, 2022 the company had 281 permanent employees, including 257 engineers. Restated consolidated revenue from operations grew from Rs. 1,428.45 lakhs in FY2020 to Rs. 3,268.80 lakhs in FY2022 (Rs. 2,239.39 lakhs for the six months ended September 30, 2022), with PAT of Rs. 712.09 lakhs in FY2022; the top 10 customers contributed 65.34% of revenue in FY2022 (89.71% in H1-FY2023).
Company Analysis
from RHPSystango Technologies Limited is an Indore-based IT services company that provides software solutions — spanning website and mobile app development, Web3/blockchain, DeFi, data engineering, cloud computing and digital marketing — enabling companies to design, implement and manage their own customized digital platforms, serving sectors such as FinTech, Hospitality, Fantasy Sports and PropertyTech.
Systango Technologies Limited was originally incorporated as 'Bushcare Overseas Private Limited' on September 17, 2004, renamed 'Systematix Technocrates Private Limited' in 2006, 'Systango Technologies Private Limited' in 2016, and converted into a public limited company in December 2022. Headquartered in the Special Economic Zone at Crystal IT Park, Indore (which entitles it to SEZ tax benefits), the company provides end-to-end software solutions — full-cycle web and mobile app development (iOS/Android), Web3 and blockchain implementations (NFTs, DApps, DeFi, DAOs, smart contracts), data engineering and machine learning, DevOps, digital marketing, product architecture and design, cloud services, and continuous engineering/product support — enabling clients to design, implement and manage customized digital platforms with strong emphasis on data and analytics. Its clients range from entrepreneurs and start-ups to established companies across 10 countries, and revenue is primarily export-driven (94.12% of standalone turnover in H1-FY2023; 95.00% in FY2022), with the USA (~67-68%) and UK (~15-19%) the largest markets. Engagements are governed by master services agreements priced on a fixed-price/fixed-time or time-and-materials basis. Operations are supported by wholly owned subsidiaries Isystango Ltd (UK, acquired from the promoters in 2022 for Rs. 268.72 lakhs), Systango LLC (USA, incorporated 2020) and Systango Account Aggregator Services Private Limited. As of September 30, 2022 the company had 281 permanent employees, including 257 engineers. Restated consolidated revenue from operations grew from Rs. 1,428.45 lakhs in FY2020 to Rs. 3,268.80 lakhs in FY2022 (Rs. 2,239.39 lakhs for the six months ended September 30, 2022), with PAT of Rs. 712.09 lakhs in FY2022; the top 10 customers contributed 65.34% of revenue in FY2022 (89.71% in H1-FY2023).
Objects of the Issue
- Strategic Investment and Acquisitions Rs. 800.00 Lakhs p.73
- Investment in Subsidiaries Rs. 1000.00 Lakhs p.74
- To Meet Working Capital Requirements Rs. 1000.00 Lakhs p.74
- General Corporate Purpose Rs. 343.13 Lakhs p.75
- Issue Expenses Rs. 338.79 Lakhs p.75
Issue Structure
- Total Issue
- ₹ 3481.92 Lakhs (38,68,800 Equity Shares at ₹ 90 per Equity Share)
- Fresh Issue
- 38,68,800 Equity Shares aggregating to ₹ 3481.92 Lakhs
- Offer for Sale
- Nil — NOT APPLICABLE AS THE ENTIRE ISSUE CONSTITUTES FRESH ISSUE OF EQUITY SHARES
- Price Band
- Floor Price ₹ 85 – Cap Price ₹ 90 per Equity Share
- Lot Size
- 1600 Equity Shares (and in multiples of 1600 equity shares thereafter)
- Face Value
- ₹ 10 per Equity Share
Business Model
The Company earns revenue primarily from export sales of software development and IT services delivered directly and through its wholly owned subsidiaries, billed under master services agreements on a fixed-price/fixed-time or time-and-materials basis; the USA and UK together accounted for 87.33%, 82.67% and 81.86% of revenue from operations for the six months ended September 30, 2022, FY2022 and FY2021 respectively.
Business Segments
SWOT Analysis
- • Experienced promoter-led management with 15+ years individual industry experience(p.104)
- • Large dedicated engineering workforce of 257 engineers(p.105)
- • Diversified revenue across multiple geographies, predominantly export-driven(p.105)
- • Diversified client base across verticals with 5+ year relationships driving repeat business(p.105)
- • End-to-end IT service offerings across the full product development lifecycle(p.105)
- • Recognized UI/UX design capabilities with hyper-focus on customer success(p.106)
- • SEZ-headquartered operations conferring tax benefits under SEZ norms(p.103)
- • Strong historical revenue growth and profitability track record(p.103)
- • Heavy customer concentration - top 5 customers were 89.71% of revenue in H1 FY23, with no long-term/exclusive customer arrangements(p.28)
- • High employee-cost intensity (~80% of total expenses) in an industry with high attrition(p.29)
- • Registered and Administrative office lease agreements have expired (renewal pending with MPAKVNL); branch office rented from promoter's HUF(p.30)
- • History of statutory/regulatory non-compliances, including unfiled FEMA forms for US subsidiary with RBI approval still pending(p.31)
- • Rs. 800 lakhs of IPO proceeds earmarked for acquisitions although targets are not identified and no definitive agreements exist(p.32)
- • Outstanding legal proceedings against the Company (direct tax and criminal matters, amounts unascertainable)(p.32)
- • Heavy dependence on Promoters and Key Managerial Personnel for continued success(p.36)
- • Limited experience managing operations in overseas markets where new subsidiaries operate(p.37)
- • Expand technological capabilities and domain expertise into AR, ML and AI(p.106)
- • Pursue strategic acquisitions and alliances to add technologies, sectors and clients(p.106)
- • Geographic expansion through subsidiaries into EMEA, APAC and Americas(p.74)
- • Tailwind from fast-growing Indian technology industry (15.5% YoY growth to US$227 bn in FY22)(p.94)
- • Rapidly expanding app development market (US$106.27 bn in 2018 to US$407.31 bn expected by 2026)(p.96)
- • Growing demand from emerging regions beyond the traditional US/UK client base(p.100)
- • Policy support permitting 100% FDI under automatic route in software/IT services(p.94)
- • Blockchain adoption opportunity - WEF anticipates 10% of global GDP stored on blockchain by 2025(p.101)
- • Significant revenue dependence on exports to USA and UK (87.33% of revenue in H1 FY23)(p.31)
- • Dependence on stability of US policies and economic conditions(p.41)
- • Foreign exchange rate fluctuations causing transaction losses (Rs. (127.34) lakhs loss in H1 FY23)(p.35)
- • Growing competition from domestic and international companies(p.112)
- • Rapid technological change and risk of technology/service obsolescence in IT services(p.33)
- • Adverse changes in tax regulations, including modification of SEZ tax-holiday benefits(p.34)
- • Global financial market turmoil impacting Indian economy and markets(p.41)
- • Uncertain impact of COVID-19 or future severe communicable disease outbreaks(p.42)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Nilesh Rathi | Promoter & Whole Time Director & CFO | 48.37% | 35.61% |
| Vinita Rathi | Promoter & Managing Director | 49.27% | 36.27% |
| Priyesh Rathi | Promoter Group | 0.09% | 0.06% |
| Suresh Rathi | Promoter Group | 0.00% | 0.00% |
| Mayur Khandelwal | Promoter Group | 0.01% | 0.01% |
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.