Latent View Analytics IPO – How good is this IPO?
Latent View Analytics IPO (Latent View Analytics Limited IPO) Details
Chennai based Latent View Analytics is coming up with IPO that would open for subscription on 10th November 2021. Latent View provides analytics services such as data and analytics consulting, business analytics & insights, advanced predictive analytics, data engineering, and digital solutions. Company has stable revenues in the last 3 years. Its margins are good and improving year on year in the last 3 years. Should you invest in Latent View Analytics IPO? What are the risk factors in this IPO? Let me do IPO review and indicate whether investors should buy or not.
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About Latent View Analytics Limited
Latent View Analytics Limited provides various analytics services such as data and analytics consulting, business analytics & insights, advanced predictive analytics, data engineering, and digital solutions.
It provides services to blue-chip companies in Technology, BFSI, CPG & Retail, Industrials, and other industry domains.
Its business is classified into
(i) Consulting services – It involves understanding relevant business trends, challenges, and opportunities and preparing a roadmap of data and analytics initiatives that addresses them;
(ii) Data engineering – To design, architect, and implement the data foundation required to undertake analytics;
(iii) Business analytics – Which delivers analysis and insights for clients to make more accurate, timely and impactful decisions; and
(iv) Digital solutions – The company develops to automate business processes, predict trends and generate actionable insights.
It has presence across USA, Europe, and Asia through their subsidiaries in the USA, Netherlands, Germany, United Kingdom, and Singapore, and their sales offices in San Jose, London, and Singapore. Company has worked with over 30 Fortune 500 companies in the last three fiscals and some of the key clients include Adobe, Uber Technology, and 7-Eleven.
Latent View Analytics IPO details
| IPO Opening Date | 10-Nov-21 |
| IPO Closing Date | 12-Nov-21 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 1 per equity share |
| IPO Price band | Rs 190 to Rs 197 per equity share |
| Lot Size | 76 Shares |
| Min Order Quantity | 76 Shares |
| Listing at | BSE and NSE |
| Issue Size | Total Rs 600 Crores 1) OFS – Rs 126 Crores 2) Fresh issue – Rs 474 Crores |
| Book Running Lead Managers | ICICI Securities, Axis Capital and Haitong Securities India |
| Employee Discount | Rs 9 per share |
Latent View Analytics IPO RHP Prospectus
What are Latent View Analytics strengths?
1) Company is one of the leading pure-play data analytics companies in India
2) It has extensive experience across a range of data and analytics capabilities
3) Company has Blue-chip clients across industries and geographies
4) Company’s focus on innovation and R&D
5) Company has scalable and attractive financial profile
6) Company with Strong, experienced leadership team
What are the Objects of the Offer?
Latent View Analytics IPO Size is Rs 600 Crores, out of which
1) Offer for Sale (OFS) for Rs 126 Crores – Under OFS, selling shareholders would sell their shares and company would not get any money from this IPO proceeds.
2) Fresh issue for Rs 474 Crores – These proceeds would be used for the following
Funding inorganic growth initiatives;
Funding working capital requirements of Latent View Analytics Corporation, company’s material subsidiary;
Investment in subsidiaries to augment their capital base for future growth; and
General corporate purposes
Who is the promoter of Latent View Analytics Limited?
Adugudi Viswanathan Venkatraman and Pramadwathi Jandhyala are the company promoters.
How is the company financial track record?
Here are the total assets, revenues and profits of the company in the last 3 years.
| Financial Year ending / Period ending (Amt in Mns) | ||||
|---|---|---|---|---|
| Particulars | FY19 | FY20 | FY21 | Qtr ending 30-Jun-21 |
| Total Assets | 3,236.8 | 3,978.5 | 5,192.0 | 5,880.1 |
| Revenues | 2,959.0 | 3,296.7 | 3,267.1 | 917.4 |
| Profit After Tax | 596.7 | 728.5 | 914.6 | 223.1 |
| Profit % | 20.16% | 22.10% | 28.00% | 24.32% |
Why to invest in Latent View Analytics IPO?
Here are the positive factors in this company.
1) Company is one of the pure play data analytics companies in India. Company has blue chip clients across industries and geographies.
2) Company has stable revenue growth. It generated revenue of Rs 295.9 Crores in FY19 Vs Rs 326.7 Crores for FY21.
3) Company has good margins of over 20% in the last 3 years. These margins are improving year on year too. It generated profits of Rs 59.6 Crores (20%) for FY19 Vs Rs 91.4 Crores (28%) for FY21.
4) Company employees would get discount of Rs 19 per share (approx. 10%) if they apply through this IPO.
Risk Factors in Latent View Analytics IPO
1) Historically, company has entered into long-term partnership with few of its key clients. This resulted in limited number of clients which accounts for substantial portion of its revenue. If such clients do not renew their contracts with them or expand the scope of services, it can result in loss of business and impacts the financials of the company.
2) The ongoing impact of Covid-19 pandemic on its business and operations are uncertain and it may impact in future too.
3) Company derives 90% of its revenue from clients located in USA. Any adverse development in this market could adversely affect its business.
4) Company proposes to utilize the net proceeds to undertake acquisitions for which targets have not been identified.
5) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.
Latent View Analytics IPO dates for subscription, Allotment and Listing
| Offer Open | 10-Nov-21 |
| Offer close | 12-Nov-21 |
| Finalization of Allotment | 16-Nov-21 |
| Initiation of Refunds | 17-Nov-21 |
| Credit to Demat Account | 18-Nov-21 |
| IPO Shares Listing Date | 22-Nov-21 |
Is Latent View Analytics IPO Price is underpriced or overpriced?
Latent View Analytics share price band is Rs 190 to Rs 197 per share.
1) If we take last 3 years weighted average EPS of Rs 4.42 and upper price band of Rs 197, the P/E ratio works out to 44.5x.
2) If we take FY21 EPS of Rs 5.1 and upper price band of Rs 197, the P/E ratio works out to 38.6x.
3) If we take Q1 FY22 EPS of Rs 1.25 and annualize for FY22, the P/E works out to be 39.4x.
4) Means company is asking IPO price in the P/E range of 38.6x to 44.5x.
As per RHP there is only one listed peer, Happiest Minds Technologies who are in similar business which is trading at P/E 118x. While one should not go with single company P/E, the IPO price for P/E range of 38x to 45x can be considered as fully priced.
What is Latent View Analytics IPO Grey Market Premium?
GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about IPO price as it is unorganized market.
Currently Latent View Analytics IPO GMP is not available as there are no trading’s happening as of the day of writing the article.
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Latent View Analytics IPO – Review and Conclusion
You might be wondering, should I buy Latent View Analytics IPO or not?
Latent View Analytics is one of pure play data analytics company in India. Its 90% of revenues are from US clients.
Company is generating stable revenues in the last few years.
Company has strong margins growth in the last 3 years. These margins are improving year on year too.
The IPO price is fully priced.
Considering all these parameters, investors can invest in this IPO for medium to long term.
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