Kore Digital Limited IPO

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i. Kore Digital is growing passive telecommunication infrastructure provider in Maharashtra, engaged primarily in the business of installing and commissioning of Poles, Towers and Optical Fibre Cable (“OFC”) Systems in Maharashtra. “Passive infrastructure” refers to the telecommunication towers for wireless telecommunication services and “OFC” is used for the purpose of hosting and assisting in the operation of the active infrastructure used for transmitting telecommunications signals or transporting voice and data traffic.

ii. Being a passive communication infrastructure Company, they are focused towards providing passive communication infrastructure services mainly to the Telecom Network Operators, Telecom Vendors, Broad Band Service Operators and Internet Service Providers (“ISPs”) in Maharashtra, especially in locations in and around Mumbai.

iii. They also provided support services such as includes project management for laying of the duct and optic fibre cables, construction of basic transmission and telecom utilities, dark fiber leasing, optical fiber network construction, maintenance of duct and optic fibre and optical fibre project turnkey services to various, Telecom Network Operators & Broad Band Service Operators across Maharashtra.

iv. The company has laid fiber of around 450 Kms for its Telecom Network Operators are Bharti Airtel Limited, Vodafone Idea Ltd, Tata Teleservices and Reliance Jio, which includes fibre laid under Vendor Projects and own network running across Mumbai- Navi Mumbai, Thane, Bhiwandi, Kalyan, Panvel, and in Pune.

iv. Their top customers in Telecom Network Operators are Bharti Airtel Limited, Vodafone Idea Ltd, Reliance JIO, Tata Teleservices in Telecom, Vendors are Ductrove Innovations Private Limited, Sterlite Technology Limited and Usha Martin Limited, in Broad Band Service Operators are Dvois SSV Private Limited, Intech Online Pvt Ltd, and in ISPs are Dvois Communication Private Limited.

Business Operations and Process

1) Client Engagement and assignment of Project
2) Feasibility Study
3) ROW Permission
4) Project Execution
5) Link Testing and Acceptance Test
6) Project Handover and Billing
7) Operation & Maintenance (O&M)

Competitive Strengths
i. Experienced Promoter, Management Team and Skilled Workforce
ii. Established Optic fiber network in Maharashtra
iii. Efficient Business Mode

Objects of the Kore Digital Limited IPO:

The Net Proceeds from the Issue are proposed to be utilized by the Company for the following objects: i. To meet the Working Capital requirements ii. Investment in Strategic Acquisition / Joint Venture iii. General Corporate Expenses.
DRHP of Kore Digital Limited IPO
RHP of Kore Digital Limited IPO

Kore Digital Limited IPO Details:

Open Date: Jun 02 2023
Close Date: Jun 07 2023
Total Shares: 1,000,000
Issue Type: Fixed Price Issue IPO
Issue Size: 18 Cr.
Lot Size: 800 Shares
Issue Price: ₹ 180 Per Equity Share
Listing At: NSE Emerge
Listing Date: Jun 15 2023

Promoters And Management:

Mr. Ravindra Navinchandra Doshi, aged 61 years, is Promoter, Chairman and Managing Director. He holds a degree of Master of Science and Post Graduate Diploma in Management. He is actively engaged in managing the Company. He has more than 32 years of experience in the industry. He is playing vital role in formulating business strategies and effective implementation of the same. He is responsible for the expansion and overall management of the business of the Company. Mrs. Kashmira Ravindra Doshi aged 57 years, is Promoter, Executive Director and CFO. She holds a degree of Bachelor of Commerce. She has more than 30 years of experience in the industry. She assisted in managing the financial matters of the Company. She is presently looking into the financial and technical matters of the Company. Mr. Chaitanya Ravindra Doshi aged 26 years, is Promoter, Executive and CEO. He holds a degree of Bachelor of Technology (Biotech). He is currently working on setting and executing the organization's strategy, building and overseeing the executive team.

Financials of Kore Digital Limited IPO:

A. Balance Sheet
Particular (In Lakhs) Mar-20 Mar-21 Mar-22 Mar-23
Equity Share Capital 1.00 1.00 1.00 252.00
Reserves 7 33 251 254
Borrowings 0 22 18 246
Trade Payables 30 39 1021 18
Other Liabilities 150 490 151 1159
Total Liabilities 180 551 1189 1423
Net Block 0 33 24 408
Investments 0 0 7 10
Total NC Assets 0 33 31 417
Receivables 1 134 185 387
Inventory 184 272 941 1262
Cash & Bank 4 14 132 2
Other Assets 0 132 152 29
Face value 10 10 10 10
B. Profit & Loss Statement
Particular (In Lakhs) Mar-20 Mar-21 Mar-22 Mar-23
Sales 88 398 1694 1594
Raw Material Cost 261 279 1973 1003
Change in Inventory -184 -88 -669 -7
Employee Cost 7 11 44 38
Other Expenses 1 154 33 100
Other Income 0 0 1 0
Depreciation 0 5 8 5
Interest 0 1 2 12
Profit before tax 2 35 302 444
Tax 0 9 84 105
Net profit 2 26 218 339
C. Cash Flow Statement
Particular (In Lakhs) Mar-20 Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 1.82 40.92 311.9 460.05
Receivable 0.48 -133.9 -50.82 -139.55
Inventory -184.37 -87.59 -668.84 -7.43
Payable 29.65 8.55 981.95 -1,343.19
Loans And Advances 3.05 -61.55 -63.97 157.72
Other WC Items 152.7 268.89 -301.89 973.88
Working Capital Changes 1.51 -5.6 -103.57 -358.56
Direct Taxes 0 9.44 84.29 105.07
Net Cash Inflow from Operating Activity 3.34 25.88 124.05 14.16
Cash from Investing Activity
Fixed assets purchased 0 -37.43 0 -380.99
Other investing items 0 0.07 0.52 0
Net cash inflow from investing activities 0 -37.37 0.52 -380.99
Cash from Financing Activity
Proceeds from borrowings 0 21.96 -4.24 221.94
Intrest paid fin 0 -0.76 -1.73 -11.12
Net Cash Flow 3.34 9.71 118.6 -173.72
 

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Kore Digital Limited 16 3.39 9.62 18.71 180 63
Suyog Telematics Limited 144 46 44.18 8.32 367 385

Recommendation on Kore Digital Limited IPO:

Review and Recommendation of Kore Digital SME IPO by IZ team is 4/10 (i) Kore Digital is a growing passive telecommunication infrastructure provider based in Maharashtra, India. (ii) The company's primary business is installing and commissioning poles, towers, and optical fiber cable (OFC) systems in Maharashtra. (iii) Passive infrastructure refers to telecommunication towers used for wireless telecommunication services, while OFC is used to transmit telecommunications signals and transport voice and data traffic. (iv) Kore Digital focuses on providing passive communication infrastructure services to telecom network operators, telecom vendors, broadband service operators, and internet service providers (ISPs) in Maharashtra, particularly in and around Mumbai. (v) In addition to infrastructure installation, the company offers support services such as project management for laying ducts and optic fiber cables, construction of transmission and telecom utilities, dark fiber leasing, optical fiber network construction, maintenance of ducts and optic fiber, and turnkey services for optical fiber projects. (vi) The company has laid approximately 450 kilometers of fiber for telecom network operators, including Bharti Airtel Limited, Vodafone Idea Ltd, Tata Teleservices, and Reliance Jio. This includes fiber laid under vendor projects and their own network spanning Mumbai, Navi Mumbai, Thane, Bhiwandi, Kalyan, Panvel, and Pune. (vii) Kore Digital's top customers in the telecom network operators category include Bharti Airtel Limited, Vodafone Idea Ltd, Reliance Jio, and Tata Teleservices. Among telecom vendors, their clients are Ductrove Innovations Private Limited, Sterlite Technology Limited, and Usha Martin Limited. In the broadband service operators category, they serve Dvois SSV Private Limited and Intech Online Pvt Ltd, while Dvois Communication Private Limited is one of their ISP customers. (viii) The business in which company is working is highly competitive. (ix) There is no growth in the Revenue in the last 2 years. (x) EBITDA margins in Fy22 is ~18% (xi) Valuation at P/E of 18x looks overvalued.

Lead Manager of Kore Digital Limited IPO:

  1. First Overseas Capital Limited

Registrar of Kore Digital Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Kore Digital Limited B 1107-1108, Shelton Sapphire Sector 15, CBD Belapur Navi Mumbai Thane 400614 Phone: +91 6354458154 Email: cs@koredigital.com Website: http://www.koredigital.com/

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