Subscribe to Persistent IPO: Aditya Birla Money

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Aditya Birla Money has come out with a research report on Persistent Systems' IPO. The broking firm has recommended subscribing to the issue with long-term perspective.

The initial public offering (IPO) of Pune based software product development company opened for subscription. The company will raise around Rs 157.17-168 crore at price band of Rs 290-310 per equity share via 54,19,706 equity shares issue.

The report says, "On the upper band of the issue price Rs 310, the company has priced its issue on a PE of 12.34x on its annualized earnings and P/BV of 1.95x on postissue. Since Persistent is a pure OPD player, there are no listed comparisons available but other similar sized players like Sasken and Hexaware trade at a P/E of lower than 10."

"Persistent Systems has quite strong investor base with the likes of Norwest Venture Partners (15%), Gabriel Venture Partners (5%), Intel Capital (4%) and HP (1%), which together hold about 25% in the firm. By considering the factors such as - product profile, higher retention ratio, debt free, relatively high cash and investments position and strong investor base, we recommend subscribe on the issue with long-term perspective," according to Aditya Birla Money.

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To read the full report click on the attachment