Tutorials Point India Limited IPO

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(i) The company was incorporated on June 12th, 2014 as a Private Limited Company under the name and style of Tutorials Point (India) Private Limited under the provisions of the Companies Act, 2013 with the Registrar of Companies, Hyderabad, Telangana.

(ii) The company is an online education service provider, is presently working towards publishing high-quality educational content, notes, videos & resources (e.g. coding terminals, development tools, articles, questions & answers) to students as well as IT professionals worldwide.

(iii) The idea of Tutorials Point originated from the idea that there exists a class of readers who respond better to online content and prefer to learn new skills at their own pace from the comforts of their drawing rooms. Since inception, the tutorial point has strived to deliver “Simply Easy Learning” with clear, crisp, and to-the-point content on a wide range of technical and non-technical subjects for students.

Most of the content and resources are freely available to encourage readers to acquire as many skills as they would like to. A customer can directly access the content without having to register on the website (https://www.tutorialspoint.com/) for most of the content available.

(iv)  In FY 2018-19, they have around 12.87 Cr readers worldwide who read more than 64.54 Cr pages of the tutorials. With approx. than 25.7 Cr sessions held in above period with an average session duration of around 4 mins, they have created a strong base in the online education services worldwide.

Objects of the Tutorials Point India Limited IPO:

(i) To create, develop and market e – tutorial content for 6th – 12th standard, IIT/JEE & NEET. (ii) To Acquire IT Hardware. (iii) To meet General Corporate Expenses.

Tutorials Point India Limited IPO Details:

Open Date: Sep 30 2019
Close Date: Oct 03 2019
Total Shares: 3,140,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 20.10 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 60-64 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 14 2019

Promoters And Management:

(i) Mohammad Mohtashim, aged 47 years, is the Promoter and Chairman cum Managing Director of our Company. He has completed his graduate degree from Aligarh Muslim University in (Computer Science). He has experience of more than 17 years with Data Communication, telecom and Telecom Billing. Experienced with top IT & telecom companies like Nawras (Muscat), ARMILLAIRE  technologies Inc. (USA), Hughes Software Systems Ltd India, and Expert Software Ltd India, Convergys India Pvt. Ltd. Holding Project Management Professionals (PMP) Certificate from PMI, USA. (ii) Mahnaz Fatima, aged 41 years, is the Promoter and Whole-Time Director of our Company. She has completed her graduation Upto part II in the field of Arts from Meerut University. She is having experience of 10 years as the content manager, mainly in the domain of generic content management.

Financials of Tutorials Point India Limited IPO:

Year Revenue(Cr) EBITDA(cr) PAT(Cr) No. of Shares(cr) EPS
2017 10.37 4.74 2.93 1.065 2.75
2018 10.25 5.66 3.7 3.47
2019 10.35 6.38 4.03 3.78

Comparison With Peers:

There are no listed peer group comparable companies in India which are a purely online education service provider, and are working towards publishing high-quality Education Content, Notes, Videos & Resources

Recommendation on Tutorials Point India Limited IPO:

Review and Recommendation of InvestorZone is:  2/10 1. The Valuation is expensive in terms of P/E multiple of 17x. The company is asking for a valuation of 40 cr in the market at 10 cr of revenue which is very expensive. 2. The 94.18% business is coming from google ads only. Any policy change in google ads may hamper the profitability of the company. 3. No moat in the business and historically companies in the education sector never performed well in dalal street. 4. The sector in which the company is working highly competitive.

Lead Manager of Tutorials Point India Limited IPO:

  1. Holani Consultants Private Limited

Registrar of Tutorials Point India Limited IPO:

  1. Link Intime India Private Limited

Discussion on Tutorials Point India Limited IPO:

    (i) Total Shares after IPO = 1.065 Cr

    (ii) IPO Price = 64

    (iii) M.Cap = ~70 Cr

    (iv) Revenue = 10 Cr

    (v) PAT ( FY19) = 4.03 Cr

    (vi) P/E= 17

    (vii) Mcap/Sales = 7

    The Valuation are very expensive. The company has no growth in revenue in the last 3 years. The revenue for FY19 is just 10 cr and the company is asking valuation of 70 Cr which is quite high.

    Add to this

    – mostly Indian traffic where it is difficult to earn money

    – Byjus and topper are way ahead of this and burning huge money so difficult for tutorials point to scale up with this amount.

    Avoid

    1. No growth in revenue in the last 3 years.

    2. No moat in the business.

    3. Anybody with good skills can start his/her YouTube channel and start earning and competing.

    4. No capex is required which means easy to start a business.

    5. Highly competitive sector.

    6. In the past no company in education sector has made money for investors.