DC Infotech and Communication Ltd IPO

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(i) The company had started the business of, assembling, trading, and servicing of electronic items, computers, computer peripherals under the name “DC INFOTECH” at Mumbai. The Company operates in the B2B & B2C sales model and plays a key role in the supply chain consolidator between OEM / Vendor / Manufacturer and Channel partner/End customer. Based out of Mumbai, the core competencies are in the fields of LAN, WAN, Data Security, Wireless, Remote Management, IP Surveillance, Passive Solutions.

(ii) They are an IT Solution distribution house in India having commenced their operations with reselling and redistribution of IT hardware products like Cabinets, motherboard, etc. Engaged in the distribution business, the Company has partnered with a number of networking and security brands for distribution in the
country.

(iii) Currently, they operate with a dealer network of around 1600 dealers and through sales representatives. They play the role of an IT Distributor offering the bouquet of services. They act as the link between the IT manufacturers/ developers and end-users and other resellers.

InvestorZone Take:

The DC Infotech fulfills the requirement of an organization to set up an Internet network. The moat in the business is very low. The company is buying LAN products from OEMs and installing them at the required locations of the clients. The competition is very high in this sector. Moreover, these days companies have inhouse staff to carry out setting up such a network.

Objects of the DC Infotech and Communication Ltd IPO:

The issue comprises of fresh issue of 24,00,000 equity shares by our Company aggregating Rs 1080.00 Lakhs. The Company proposes to utilize the Net Proceeds from the issue towards the following objects: 1. Meeting incremental working capital requirements. 2. General corporate purposes

DC Infotech and Communication Ltd IPO Details:

Open Date: Dec 12 2019
Close Date: Dec 18 2019
Total Shares: 24,00,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 10.8 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 45 Per Equity Share
Listing At: NSE Emerge
Listing Date: Dec 26 2019

Promoters And Management:

(i) Chetankumar Timbadia, aged about 50 years, is the Promoter and Managing Director of the company. He graduated with a degree of Bachelor of Engineering (Computer Engineering) from the Ramrao Adik Institute of Technology, New Bombay. He has experience of around two decades in the Information technology (IT) sector. Over the years, he has developed the network of vendors, channel partners, and customers through his adeptness in building long term relationships across technologies, verticals, compliances and geographies. (ii) Devendra Sayani, aged about 51 years, is Promoter and Chairman and Whole Time Director of the company. He graduated with a degree of Bachelor of Engineering (Electronics) from the Ramrao Adik Institute of Technology, New Bombay. He heads the marketing and commercial relationship management departments of the Company.

Financials of DC Infotech and Communication Ltd IPO:

(Fig. in Crs)
Year Revenue EBITDA OPM PAT NPM EPS Debt Net-worth
2017 108 2.14 2.0% 0.9 0.8% 1.5 8.38 10.85
2018 97 3.01 3.1% 1.3 1.3% 2.17 10.68 11.54
2019 113 4.11 3.6% 1.33 1.2% 2.22 18.34 15.64
3MFY20 36 1.35 3.8% 0.9 2.5% 1.5 20.32 5.13
InvestorZone Take 1. The Revenue in the last 3 years is inconsistent. 2. Debt/Equity as on 31.03.2019 is 3.96x, which is very high. 3. The Average EPS for the last 3 years is 1.96. The P/E based on this average EPS is 22.95. As per DRHP, Peer, Creative Peripherals and Distribution Limited, is available at P/E of 7.5x. 4. Cash-flow for the first 3MFY20 is negative. 5. Total receivables up to 3MFY20 stand at Rs. 23.34 Crores on revenue of 36 Crores. This shows the company is not able to get its money from the distributor on time. The impact of which is shown in cash-flow.

Recommendation on DC Infotech and Communication Ltd IPO:

Review and Recommendation of InvestorZone is: 3/10 [ The company has inconsistent top-line, high D/E, and asking very high P/E of 22.32x]

Lead Manager of DC Infotech and Communication Ltd IPO:

  1. Fedex Securities Limited

Registrar of DC Infotech and Communication Ltd IPO:

  1. Satellite Corporate Services Private Limited

Company Address:

DC Infotech and Communication Ltd Unit No. 2, Aristocrate, Ground Floor, Lajya Compound, Mogra Road, Andheri (East), Mumbai 400069 Phone: 022-28329000 Email: cs@dcinfotech.com Website: http://www.dcinfotech.com/

Bid Details of DC Infotech and Communication Ltd IPO as on
18-Dec-2019 17:00:00 IST

Category No.of shares offered No. of shares bid
1,137,000 1,752,000
1,137,000 1,998,000
126,000 126,000
2,400,000 3,876,000
QIBs No
QIBs+HNIs Subscription 1.54X
Retail Subscription 1.76X
Total Subscription 1.65X

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