Aurionpro Solutions Ltd

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IPO Profile

Aurionpro Solutions Ltd.
Registered Office Address 1D, Dhiraj Pen Compound, 58 / 59 Andheri - Kurla Road, Andheri East, Mumbai 400 059, India
Phone 91-22-28252721 - 23 Fax 91-22-28321932
Email [email protected] Website http://www.aurionprosolutions.com
Issue Open 27/09/2005 Issue Close 04/10/2005
Issue Size 3000000 Issue Type Book Building
Face Value Rs.10/- Price Range Rs.81/- to Rs. 90/-
Tick Size Re.1/- Market Lot 70
Minimum Order Qty 70 Listing Stock Exchange Mumbai, NSE
Registrar To The Issue Bigshare Services Pvt. Ltd.
Book Running Lead Managers Centrum Capital Ltd., Karvy Investor Services Ltd
Analysis

Background :
The Company incorporated in the year 1997, as Value Added Information Distribution Services Private Limited. In the year 2003, the company changed its name to Aurionpro Services Pvt. Ltd. The company got converted into a public limited company on March 09, 2005 and named as Aurionpro Solutions Limited (Aurionpro).
Aurionpro is one of the earliest entrants in India, to provide web-based solutions to the banking and financial services companies as well as to technology companies.
Aurionpro has two wholly owned foreign subsidiaries one in Singapore and another in USA. The company also has strategic alliance in Singapore, Thailand, Malaysia, Indonesia, UAE, Qatar and other Middle East countries. These alliances assist Aurionpro to market its services and provide support for the proper execution of the projects in their respective regions.
The client list of the company includes HDFC Bank, UTI Bank, ABN Amro Bank, Deutsche Bank, BankServ of USA, Development Bank of Singapore, Kotak Bank, Qatar Insurance Corporation, etc.
Objects Of The Issue :
Expansion of Facilities
Certifications
Acquisitions
Setting-up of overseas Offices
Providing additional Working Capital

Strengths :
The company has international presence, which facilitate it to service and support its foreign clients and also to develop new overseas clients with minimum costs and in lesser time. Promoters plan to take the Company to Europe also in the near future.
As per the Strategic Review of 2004 released by NASSCOM, IT spending is expected to attain an annual growth rate of 5.4% in the global market. In an another study conducted by TowerGroup, a banking IT research and consulting firm, there is 2.3% increase in the global spending on financial services technology from US$ 326 billion in the year 2002 to US$ 334 billion in the year 2003. TowerGroup also anticipates that expenditure on new technology by banks will increase and devour around 35% of the total IT Spending. Aurionpro with its experienced professionals and related softwares is well positioned to retrieve its due share from this business.
India has positioned itself as a leading destination for offshore technology services. A NASSCOM-KPMG report (2004) has projected the Indian IT services (including the exports) to realize US$ 49 billion by 2009 as this figure was US$ 10 billion in the year 2003. This is expected to grow at the CAGR of 30%. To Aurionpro, the Indian market contributed more than 30% of the total income in the year 2004-05. Therefore there will be direct benefit to Aurionpro from the growth of Indian IT services market.
In one of the study of TowerGroup, the major IT spending will be in the area of risk management and expected to be around US$ 21 billion in the year 2005 where as this figure was US$ 16 billion as on 2002. Aurionpro has a range of proven products in the niche areas of Cash Management, Treasury and Risk Management. This will assist the company to catch attention of various banks and financial service companies to have Aurionpro as their service provider.

Weaknesses :
Aurionpro is a small company and depends highly on its current customers. The loss of any of the major clients or a decrease in the price at which the product is outsourced will adversely affect revenues.
The debtor to total asset percentage of Aurionpro in the year 2005 is 64%. Company like I-Flex solutions limited has this figure as 26%. This is one of the negative features of Aurionpro as most of its sales are unrealized.
The Company is a new entrant in international banks market and making huge investment abroad through acquisition or setting up offices. Therefore Aurionpro's growth depends mainly on acquiring new foreign customers.
Aurionpro, having no visible brand name competes with large established players in Indian market as well as in international markets like Polaris Software Lab limited, I-Flex Solutions Limited, etc

Valuation :
The company has realized 121% growth in the total income. The income has increase from Rs 4.74 crore in the year 2004 to Rs 10.47 crore in the year 2005. The Profit After Tax is Rs 2.77 crore in the year 2005 where as in the year 2004 it was Rs 0.52 crore. This indicates more than 400% growth in the PAT.
Return On Net Worth is 24.68% for the fiscal 2005. The NAV of the company for the fiscal 2005 is Rs 14.05.
Pre issue EPS of the company is Rs. 3.56 for the Fiscal 2005 and post issue EPS has come out Rs 2.56.
P/E multiple is Rs 31.60 when the Issue Price, at the lower price band, is Rs 81 and P/E multiple is Rs 35.11 when the Issue Price, at the higher price band, is Rs 90. The company comes under the Computers-Software industry of Medium/ Small size and the P/E multiple of this industry is 21.6.
 

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