Tracxn Technologies IPO Closes Today. Should You Invest?

Tracxn Technologies IPO: Tracxn Technologies share sale via initial public offering (IPO) will close today. The company is raising Rs 309.38 crore from the IPO which is completely an offer for sale (OFS) by its existing shareholders and promoters. Its promoters Neha Singh and Abhishek Goyal are offloading 7,662,655 shares each. Among the other prominent shareholders, Sachin Bansal and Binny Bansal are also selling 1,263,096 shares in the IPO.

Should You Invest In Tracxn Technologies IPO?

Domestic brokerage firm Swastika Investmart has avoid rating on the IPO. Swastika has raised concerns about the IPO as it is a complete OFS for Rs 309.38 crore so the company would not get any money.

Swastika added that it is a loss making company and has been incurring losses in the last three years. However, it turned into profits for quarter ending June 22.

While assigning the avoid rating for the IPO Swastika said that Tracxn Technologies faces stiff competition from private players such as Crunchbase, CBInsights, PrivCo & Pitchbook.

“The company has witnessed strong growth in its top line in the previous three years due to the technology & startup boom during the pandemic and robust M&A activities. Nevertheless, the company faces significant competition from private players such as Crunchbase, CBInsights, PrivCo & Pitchbook, and free online and offline sources of information on companies & businesses, including government records, company websites, and open online databases,” Swastika said in a report.

“Due to the rising interest rates globally and recessionary conditions in major markets like North America and Europe the Private Equity Markets, Venture Capital markets, Investment Banks, and Family offices are witnessing a significant cutback in terms of activities and traction; additionally, M&A activities have been subdued. Thus we believe that the company will find it difficult to substantially grow its client base and top line in the coming years. Finally, the exorbitant valuation of price to sales of 12.5 times (Based on FY 22 numbers and Upper band price) makes it very difficult to recommend this issue. Thus we have assigned Avoid Rating for this issue,” Swastika added.

Brokerage firm Religare has neutral rating on the stock. "The Company has a diverse base of 1,139
Customer Accounts present in over 58 countries, as of June 30, 2022. These customer accounts are for Customers that include ‘Fortune 500’ companies and/or their affiliates. Further, their global customer base helps them limit their dependency on a specific customer, industry or geography thereby reducing financial and concentration risk," Religare said.

Tracxn Technologies IPO Price Band

The Bangalore-based company has fixed price band of Rs 75-80 per share and retail investors can bid for minimum one lot of 185 shares up to maximum of 13 lots. At the upper end of the price band, one lot of Tracxn Technologies shares will cost Rs 14,800.

The company has reserved 75 per cent of the issue for Qualified Institutional Buyers (QIBs), 15 per cent for Non-Institutional Investors and 10 per cent for Retail Shareholders.

Tracxn Technologies Company Profile

Founded in 2013, Tracxn Technologies provides market intelligence data for private companies. The company's extensive global database and customized solutions and features allow its customers to source and track companies across sectors and geographies to address their requirements.

The company is ranked among the top five players globally in terms of the number of companies profiled offering data on private market companies across sectors and geographies. The company has an asset light business model and operate a Software as a Service ("SaaS")-based platform, Tracxn, that scanned over 662 million web domains, and profiled over 1.84 million entities across 2,003 Feeds categorized across industries, sectors, sub-sectors, geographies, affiliations and networks globally, as of May 31, 2021.