Uniinfo Telecom Services IPO Subscribed 18% on Day 1, Should You Invest?

Uniinfo telecom services ltd, launched an Initial public offering (IPO) on March 05th. The company has decided to raise capital up to Rs. 20.01 Cr. to meet working capital requirement and for repayment of debts.  Uniinfo Telecom IPO on NSE SME is fixed price issue type with minimum application size of 2000 shares and in multiples thereon.  

As on 05-Mar-2018 17:00:00 IST the  Uniinfo Telecom IPO was subscribed 0.18 times.

Uniinfo telecom services business profile

Uniinfo telecom services ltd. established in year 2010, it provides services to telecom industry players from telecom equipment manufacturers to telecom operators. Their services includes network survey and planning, Network testing and optimization, Installation and commissioning etc.

Uniinfo telecom services have been successfully implementing various projects over the years. They have track record of timely and quality execution of projects.

The key clients of the company are: Reliance jio, Nokia, Samsung, Huawei, Airtel and Vodafone.

The company is an ISO 9001:2005 and OHSAS 18001:2007 certified.

Key dates of Uniinfo telecom services IPO

• Issue opens: March 5, 2018- March 7, 2018
• Issue size: 2,834,000 equity shares of Rs. 10 each.
• Issue price: Rs. 55 per equity share
• Face value: : Rs. 10 per equity share
• Finalization of basis of allotment: On or before 12^th march 2018
• Initiation of refunds: On or before 13^th march 2018
• Credit of equity shares: On or before 14^th march 2018
• Listing date: On or before 15^th march 2018

Purpose of IPO

The funds raised from the issue of IPO will be used for the following purposes.

• To meet working capital requirement-Rs. 8.35 crores
• For repayment of debt- Rs.8.15 crores
• To meet general corporate expenses- 1.76 crores
• To meet issue expenses- Rs. 1.76 crores

Valuation parameters

If we go through the financials of the company from FY 2014 to FY 2017, we can see revenue/net profit for FY 2014 is Rs. 1.50 cr. / Rs. 0.01 cr, for FY 2015 it is Rs.6.22cr. / 0.10 cr., for FY 2016 Rs.14.30 cr./0.24 cr., for FY 17 it is Rs.27.89 cr./1.08 cr. For the first half of the current fiscal i.e 1HY 2018 Revenue is Rs. 17.02 cr. and net profit is Rs. 2.16 cr.

If we annualize latest earnings and attribute it on fully diluted equity post issue, then we get P/E of 13 plus.

For last three years it has posted average EPS of Rs. 97.02

Should you invest?

The Uniinfo telecom IPO’s expected listing gain is above 20%. Tasty dairy specialties ltd. IPO day listing gain was 7.44% while its total profit above issue price was 13.22%. Sintercom India IPO day listing gain was 20% and its total profit above issue price was 15.23%.

Uniinfo telecom services is showing impressive financial track record. Also, its client base is strong and has record of timely and quality project completion. So, considering all these points, investors can subscribe this IPO for moderate investment with medium to long term view.