AAA Technologies IPO

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(i) AAA Technologies is an ISO 9001:2015 and ISO 27001:2013 accredited Company. They provide Information Technology and Information Security Auditing & Consulting services that enable organizations to identify the issues of corporate governance of the information system in a computerized environment and execute security controls to safeguard information and information system. The company has 64 people located at Mumbai and Delhi offices.

(ii) The Company offers IT audit services like Information System Audit, Cyber Security, IT Assurance & Compliance, Information Security, and IT Governance to BFSI, Government, Regulatory Agencies, and Public and Private Sector Organizations.

(iii) They Procure business from BFSI, Government, Regulatory Agencies, and Public Sector Companies. They bid for tenders available for CERT-In empaneled IT Security Organizations, and NICSI a company under the National Informatics Centre, Ministry of Electronics and Information Technology, GOI for providing and procuring IT solutions for multiple e-governance projects undertaken by NIC, MeitY, Governments, Government Organization, and PSU.

(iv) Over the years the Company has successfully completed audits of Companies/ Institutions across various industries like banking, insurance, Financial Institutions, NBFCs, Regulatory Bodies, Government, Municipalities and Panchayats, Payment Gateways, Stock Brokers, Education, Travel and Transport, Hospitality, Manufacturing and Engineering, Infrastructure, Healthcare, Information Technology, IT Enabled Services (ITeS), Ports, Power, Trading Corporations, Entertainment, E–Tendering, Defense and refineries.

Objects of the AAA Technologies IPO:

The net proceeds from the IPO will be used towards the following objectives; a) To use funds for expansion and development of business operations. b) To meet the working capital requirements and security deposit towards bank guarantees/LC. c) To meet issue-related expenses.

AAA Technologies IPO Details:

Open Date: Sep 30 2020
Close Date: Oct 05 2020
Total Shares: 2,436,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Issue
Issue Size: 10.23 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 42 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 13 2020

Promoters And Management:

(i) Mr. Anjay Agarwal who has over 28 years of experience, with 25 years’ experience in Information Security Audit. and is a CRISC (USA), CGEIT (USA), CISA(USA), CFE(USA), CIA(USA), ABCI(UK), FCA, ACMA, ACS, B. Com, LLB (Gen), ISA, PGDFERM, DIRM, BS7799 Certified Lead Implementer, ISO 27001 Certified Lead Implementer, ISO 27001 Certified Lead Auditor, BCMS Certified Lead Implementer, CEH, ECSA, LPT, CFAP-IT, COBIT Foundation, COBIT 86 Implementer, COBIT Certified Assessor. (ii) Mr. Venugopal Dhoot who has more than 35 years of experience, with 17 years’ experience in Information Security Audit, and is a B. Com (Hons.), LLB, FCA, DISA, and DIRM.

Financials of AAA Technologies IPO:

Particulars(in Lakh) Mar-18 Mar-19 Mar-20
Revenue 1,023 1,033 1,415
Employee Cost 271 367 441
Other Expense 622 372 473
EBITDA 130 294 501
OPM 13% 28% 35%
Other Income 16 13 9
Interest Cost 4 7 1
Depreciation 4 13 14
Profit before tax 138 287 495
Tax 37 80 123
Net Profit 101 207 372
NPM 9.9% 20.0% 26.3%
Shares 85.51 85.51 85.51
EPS in Rs 1.2 2.4 4.4

Comparison With Peers:

As per DRHP, AAA Technology has no listed peers to compare with.

Recommendation on AAA Technologies IPO:

Review and Recommendation of InvestorZone are 5/10. 1. The company has experienced management. 2. The company has shown excellent growth and the issue price is reasonably priced at P/E of 9.54x on FY20 earnings. 3. The company is debt-free and paid dividends in the last 2 years. 4. However, the company mainly caters to government projects. And if you see carefully the balance sheet, the company has very high trade receivables. This shows that the company is not getting paid on time by the Government. Plus recent COVID-19 has made government financials haywire.

Lead Manager of AAA Technologies IPO:

  1. Chartered Capital and Investment Limited

Registrar of AAA Technologies IPO:

  1. Link Intime India Private Limited

Discussion on AAA Technologies IPO: