Tracxn Technologies IPO opens on October 10th: All you need to know

Tracxn Technologies Limited IPO opens for subscription on 10th October. The company is looking to raise up to Rs 309.38 crore through the public issue. Here are the details: 

Tracxn Technologies Limited IPO Details

Tracxn Technologies IPO Date: 10 October - 12 October 2022

Tracxn Technologies IPO Price band: Rs 75 - Rs 80

Tracxn Technologies IPO Issue Size: Rs 309.38 crore (Book Built Issue IPO)

Reservation: QIB 75%, Retail - 10%, NII 15%

Minimum Investment: Rs 14,800

Market cap at the upper band: Rs 802.4 crore

Bid lot: 185 shares, and in multiples of 185 shares

Tracxn Technologies Limited IPO: Objects of the Issue

The net proceeds from the IPO will be utilized for the below purposes:

• To achieve the benefits of listing the equity shares on the Stock Exchanges 
• The sale of up to 38,672,208 Equity Shares by the selling shareholders

Tracxn Technologies Limited IPO: About Tracxn Technologies

• Tracxn Technologies provides market intelligence data for private companies and was established in 2013.
• They have an extensive global database and customized features and solutions that allow its customers to source and track companies across geographies and sectors to address their requirements.
• The company offers private company data to its customers for deal sourcing, identifying M&A targets, analysis, deal diligence, and tracking emerging themes across industries and markets, among other uses.
• Tracxn Technologies has an asset-light business model and operates a Software as a Service (SaaS) based platform.
• They are ranked among the top 5 players globally in terms of companies profiled, offering data on private market companies across sectors and geographies.
• As of June 2022, the company has 3,271 users across 1,139 Customer Accounts in over 58 countries, and its customers include several Fortune 500 companies and/or their affiliates.

Tracxn Technologies Limited IPO: Service offerings

Some of the offerings by Tracxn Technologies are listed below:

• Private company data: They provide an extensive global database of private companies across sectors, geographies, and stages.
• Emerging Technology Sector Data: They provide one of the largest coverage of private companies in emerging technology sectors globally, including comprehensive coverage of companies, detailed sector taxonomy, market map, sector trends, news, and reports.
• Transactions and Other Data: They have a comprehensive database of global private company transactions. 
• Industry Taxonomy: It provides proprietary and detailed industry taxonomy for the private market sectors and companies, with a key focus on new-age emerging technology sectors.

Tracxn Technologies Limited IPO: Industry Outlook

• The market is witnessing gradual evolution and platform based service providers are expected to make the most of growing demand.
• The growth prospects of the B2B information services companies are likely to continue to grow as businesses are looking to consolidate and will be keener to explore new start-ups, private companies, and geographies to invest in that suits their business strategies.
• In the past decade (2010-2019), the B2B information services market witnessed a CAGR of 5.6%, the growth is expected to be even more robust and the market could grow at a CAGR of 6.16% between 2020 and 2025. 

Tracxn Technologies Limited IPO: Listed peers

As per the company, there are no businesses that have a business similar to theirs and hence there are no listed peers of the company.

Tracxn Technologies Limited IPO: Financials

• For FY20, FY21, and FY22, the company has generated revenue of Rs 37.33 crore, Rs 43.78 crore, and Rs 63.45 crore, respectively. Revenue has grown at a CAGR of 38.17% in the same period.
• The company has reported losses in the last three financial years. It has reported a loss of Rs 54.03 crore, Rs 53.48 crore, and Rs 48.48 crore for FY20, FY21, and FY22, respectively.
• For the same period, EBITDA reported was Rs (6.4 crore), Rs (17.06 crore), and Rs (22.45 crore), respectively.
• For the last three financial years, the average RoNW and EPS (Basic) are (28.98)% and (2.51), respectively.
• The subscriptions from annual billing accounts comprised 58.21%, 58.50%, and 59.72% of total subscriptions billed to customers for FY20, FY21, and FY22.
• The Customer Accounts have increased at a CAGR of 30.42%. The company had 642 Customer Accounts, as of March 31, 2020, and it increased to 1,092 Customer Accounts at the end of FY22.

Tracxn Technologies Limited IPO: Unique Selling Propositions

Leading global provider: They are among the leading private market intelligence providers for private company data globally and rank among the top five players globally in terms of many companies profiled that offer private market data across sectors and geographies.

Longstanding and growing global customer base: They have a diverse base of 1,139 Customer Accounts present in over 58 countries. These customer accounts also include ‘Fortune 500’ companies and/or their affiliates. Their global customer base helps them limit their dependency on a specific customer, industry, or geography, thereby reducing financial and concentration risk.

Scalable and secure technology platform: Company's platform is based on a combination of technology and human analysts, and it is capable of processing vast amounts of data. They have a high-performance, user-friendly and interactive interface coupled with a scalable back-end framework based on open source technologies.

India-based operations: Their ability to develop and deploy the platform in India provides them with significant cost advantages. The platform requires limited costs to scale and launch additional service offerings.

Tracxn Technologies Limited IPO: Growth Potential

Increase account base: The company has been able to consistently grow its customer accounts over the last three financial years. To grow the account count further, they intend to participate in and undertake event partnerships for media and industry events.

Increase revenue from existing customers: They plan to continue to grow their operations by increasing revenue from existing customers, including those with whom they have developed long-standing relationships. 

Additional services: The company plans to introduce various product enhancements that they believe will offer value to existing customers and enable them to generate additional revenues.

Inorganic growth channels: They plan to acquire businesses and technologies that complement existing capabilities and which will result in the growth of their platform. They may consider investment opportunities to be able to acquire new technologies or generate cross-selling opportunities.

Tracxn Technologies Limited IPO: Risks

Subscription on the Tracxn platform: They derive and expect to continue to derive all of their revenues from operations from subscriptions by customers of the Tracxn platform. If the customers do not renew or expand their subscriptions, or if they renew on less favorable terms, the company's future revenue and operating results may be adversely affected.

Fund required to grow business: They may be required to raise additional funds through equity or debt in the future to continue to grow their business, which may not be available on favorable terms or at all. Investors must note that the company will not receive any proceeds from the Offer (Offer for Sale).

Dependency on data: Company's success depends on its customers’ confidence in the depth, breadth, and completeness of their private market data. If they are not able to obtain and maintain accurate, comprehensive, or reliable data, they could experience reduced demand for platforms and services. 

Heavy dependency on exchange rates: Company's 70% revenue comes in US dollars. Any fluctuations in the foreign currency exchange rates may impact its ability to optimize the equation between maintaining customer lifetime value and customer acquisition cost and eventually impact its profits.

Tracxn Technologies IPO: Analysts’ review

As of now, there are no analyst reviews available. We shall be updating this section shortly. Stay tuned!