The initial public offer (IPO) of RK Swamy opened for subscription today. The issue, which closes on March 6, comprises fresh equity sale of 60 lakh shares and an offer for sale of 87 lakh shares.

Ahead of the IPO, the company has raised Rs 187 crore from anchor investors.

RK Swamy IPO review

Analysts advised investors to subscribe to the issue as the company has demonstrated a proven capability to generate digital content at scale, establishing themselves as leaders in the field of market research.

At the upper price band, the company is valued at a P/E ratio of 46.5 of its FY23 earnings with a market cap of Rs 1453 crore post issue of equity shares and return on net worth of 22.2%.

“We believe that the valuation of the company is fairly priced and recommend a Subscribe-Long Term rating to the IPO,” said Anand Rathi.

RK Swamy IPO. 10 things to know before subscribing to the issue”While the IPO presents an opportunity for substantial returns, investors must be prepared for potential cyclical returns and a longer investment horizon. Based on the above positives, we give the issue a Subscribe rating,” said BP Wealth.

RK Swamy IPO GMP

In the unlisted market, the company’s GMP is around Rs 50.

RK Swamy IPO price band

RK Swamy has fixed a price band of Rs 270-288 per share for its maiden public offer. At the upper end, the company plans to raise Rs 423 crore.

Other details

RK Swamy stands as a prominent integrated marketing service group in India, providing a comprehensive solution encompassing creative, media, data analytics, and market research services under one roof.

Over the past five decades, they have achieved organic growth by adeptly responding to market trends and evolving client needs.
Additionally, the company boasts a 15-year track record in the data analytics and marketing technology sector.

In the fiscal year 2023, the company delivered over 818 innovative campaigns for its clients across various media platforms. It also managed a substantial volume of data, processing more than 97.69 terabytes, and conducted over 2.37 million consumer interviews through quantitative, qualitative, and telephone surveys.

R K Swamy recorded a revenue of about Rs 300 crore in FY23. Over 50% of the company’s revenue comes from digital content. It services more than 400 clients every year and the top 50% of its clients contribute 70% of its topline.

The company claims that its top 50% of clients have been associated with the company for over a decade and the top 10% of clients have a longer relationship — 19 years on average.

For FY23, the company’s revenue from operations rose 25% year-on-year to Rs 293 crore. Net profit for the same period jumped 62% to Rs 31 crore.

SBI Capital Markets, IIFL Securities and Motilal Oswal Investment Advisors are the book running lead managers for the IPO, while Kfin Technologies is the registrar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)