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TAKE Solutions looks good issue: Experts

Published on Tue, Jul 31, 2007 at 16:42 | Source : Moneycontrol.com

Updated at Tue, Jul 31, 2007 at 17:49

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TAKE Solutions, an international business technology company with a focus on life sciences and supply chain management solutions, will enter the capital market with an initial public offer (IPO) of upto 2,100,000 equity shares of Rs 10 each for cash at a price to be decided through the 100% book building process. The bid/ issue will open for subscription on August 1, 2007, and close on August 7, 2007.

Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Majority of experts said apply.

Experts/Company	Poll Result	Experts view
R S Iyer (KR Choksey)	Apply	Take Solutions is an excellent issue. People should apply for the issue.
Manish Bhatt (Prabhudas Lilladher)	Apply	Take Solutions looks to be good issue. Company has done lot of acquisition since 2004, so they raised some debts on the book. They are going to pay some debts through this IPO money. It will be debt free company in future. Promoters background is also good. People can subscribe to the issue.
SP Tulsian (Investment Advisor)	Don't Apply	The company is into providing software products and services for Supply Chain Management (SCM) and Life Sciences (LS) Verticals and have 16 products in SCM vertical and have 6 products under LS vertical. Upto 31-03-07 the company completed more than 2,500 software installations for over 250 customers which are mainly MNCs, Medium and Small sized companies. During 2004 to 2007, the company acquired stakes in various companies to foray into automotive space in India, SCM in South East Asian market and for US markets. Due to various acquisitions, debt of the company rose to Rs 138 crore from Rs.41 crores in FY 06. Even sundry debtors of Rs 78.50 crore as at 31-03-07 is quite high compared to topline of Rs 183 crore of FY 07. A debtor cycle of over 5 months. The company has now estimated a fund requirement of about Rs 142 crore of which Rs 104 crore is for repayment of debt availed for acquisitions in the past and for pre-payment of term loan. Rs 38 crore has been earmarked for product development and enhancement of domestic infrastructure facilities. Acquisition of companies/business/products seems to be main focus for which no fund has been earmarked The entire fund is being mobilized from the proposed issue. Since major chunk of the fund shall get used for loan repayment nothing much shall get used for improved performance. Considering PAT of Rs 31.64 crore for FY 07 EPS translates to Rs 26.36 on expanded equity base of Rs 12 crore. At the upper band of Rs 730, share is richly valued at a PER of close to 28. No doubt, product IT companies are always richly valued, but this is quite steep. Also due to low market perception for IT stocks, investment is not recommended in the issue.

The price band is between Rs 675 and Rs 730 per equity share. The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.

The objects of this issue are to raise fresh capital that can be deployed in the acquisition of companies, businesses and products as well as to repay the debt facilities utilised in the acquisition of ClearOrbit Inc., USA. It intends to enhance product development and domestic infrastructure facilities.

TAKE Solutions offers cost effective comprehensive business solutions backed by domain expertise, in supply chain management and life sciences. It has a presence in the US through its Life Sciences Domain Excellence centre located in New Jersey. It has a significant representation in various regions across the world through its business development offices located in India, Singapore, Malaysia and the U.S.

TAKE Solutions recently approved the allotment of a total of 900,000 equity shares to Galleon International Master Fund SPC. Limited New Silk Route Pipe Segregated Portfolio and Passport India Investments (Mauritius) Limited.