Tracxn Technologies made a muted market debut on October 20 largely due to unexciting investor subscription levels, high valuation, and the fact that the IPO was an offer for sale (OFS) where existing investors cashed out their investments.
However, some analysts are not that pessimistic on the stock. They believe the company has the potential to deliver returns in the long-term. Some investors also support this view as after the debut, the counter saw some buying interest.
“We recommend long term investors to hold stock as the company, being the leading global provider of differentiated private market data and intelligence, has a diverse, longstanding and growing global customer base,” said Astha Jain, Senior Research Analyst at Hem Securities.
“Company with its scalable and secure technology platform conceptualized and developed in-house has significant cost advantages from India-based operations along with experienced promoters, board of directors and senior management team, backed by marquee investors.”
The stock traded 19 percent higher from the issue price after listing at a premium of 5 percent. It quoted at Rs 95 on BSE, and hit a high of Rs 99.60 during the day.
“Those who applied for listing gains can maintain a stop loss of Rs.79. Post-listing, investors must wait for a few quarters before deciding whether to invest or not for the long term,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart. “We believe that the company will find it difficult to substantially grow its client base and top line in the coming years.”
Doubts are emerging because of rising interest rates globally and recessionary conditions in major markets like North America & Europe the Private Equity Markets, Venture Capital markets, Investment Banks, and Family offices are witnessing a significant cutback in terms of activities and traction; additionally, M&A activities have been subdued. This means lower demand for products of the company.
Additionally, the company faces significant challenges from private players such as Crunchbase, CBInsights, PrivCo & Pitchbook, and free online and offline sources of information on companies & businesses.
“We advise allotted investors should look for booking profits if any or exiting on listing day due to gloomy outlook, while risk takers can hold with high risk and if investors wish to add Tracxn on listing day better to wait and watch before going aggressive,” said Prashanth Tapse, Research Analyst Sr VP Research, Mehta Equities.
The Rs 309 crore received through the IPO will go to selling shareholders (promoters and investors) as the issue was entirely an offer for sale. Flipkart founders Sachin Bansal and Binny Bansal exited the company, while the shareholding of promoters Abhishek Goyal and Neha Singh dropped below 35 percent after the issue.
Launched in FY15, Tracxn has grown to be one of the major players in the private market data service provider space.
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