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AccelerateBS India

• AccelerateBS India is coming out with an initial public offering (IPO) of 6,32,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 90 per equity share.
• The issue will open for subscription on July 6, 2023 and will close on July 11, 2023.
• The shares will be listed on BSE SME.
• The share is priced 9.00 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Shreni Shares.
• Compliance Officer for the issue is Poonam Dinesh Yadav.

Profile of the company

The company is engaged in the business of providing Digital Technology Services, world class DXP (Digital Experience Platforms) Consulting and Implementation Services, Digital projects, custom software development and consulting services, delivering powerful and scalable software systems. 

The company is a Digital Technology Services company offering multitude of boutique technology services to both B2B and B2C companies around the world. Its services include Digital Technology Services, DXP (Digital Experience Platforms) Consulting and Implementation Services, Digital projects, custom software development and consulting services, delivering powerful and scalable software systems. It has built 100% in-house capabilities across DXP platforms like Crownpeak, Optimizely, Contentful and Strapi are the some of the industry leading enterprise DXP platforms that it specialize in. It has full-spectrum capabilities across these platforms and this includes Front-end, Middleware, Backend, DXP layers as well as custom integrations with products like Salesforce, Marketo, Brightcove, Adobe Omniture, SAP Commerce etc. It has full stack Microsoft and Node based capabilities and are engaged in doing new age decoupled builds with API first and micro services based architectures.

Further, it has also gained a lot of experience doing builds for regulated industries like Insurance, Financial Services, Pharma and Healthcare service providers. The company has also developed 100% in-house capabilities for front-end builds using React, Angular and Blazor. It is also engaged in doing Cognitive/AI based application builds like custom Chatbots, Voice bots etc. and are now part of its offering and a dedicated practice area for it and have also started offering WCAG Testing and Remediation as a service.

Proceed is being used for:

• Long-Term working capital requirements
• General corporate purposes

Industry overview

The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.4% of India’s

expected to increase to $101.8 billion in 2022 from an estimated $81.89 billion in 2021. Indian software product industry is expected to reach $100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery centres. The data annotation market in India stood at $250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach $7 billion by 2030 due to accelerated domestic demand for AI.

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The Indian IT & business services industry is expected to grow to $19.93 billion by 2025. Spending on information technology in India is expected to reach $144 billion in 2023. By 2026, widespread cloud utilisation can provide employment opportunities to 14 million people and add $380 billion to India's GDP.

Pros and strengths

Integrated technology platform: It has full stack Microsoft and Node based capabilities and are experienced in doing new age decoupled builds with API first and micro services based architectures. It has also developed 100% in-house capabilities for front-end builds using React, Angular and Blazor. It has also invested heavily to build capabilities in doing Cognitive/AI based application builds like custom Chatbots, Voice bots etc. and are now part of its offering and a dedicated practice area for it. 

Specialty DXP platforms: It has a decade plus of experience in the DXP space having very high entry barriers and a larger learning curve to be able to build applications on top of them. Along with the same, it is a certified solution/service partners with two prominent enterprises in the market namely, Crownpeak, Contentful and Optimizely. It has built full spectrum capabilities around these platforms for all touch points with supporting multitude of technology stacks and 100% in-house capabilities. 

MAGNET Global Network: MAGNET membership validates its Global & Local credibility, provides scale, an enhanced competitive muscle, partnerships, thought leadership and access to global markets. This also brings forth the possibilities of internal MAGNET partnerships and shared businesses, strengthening its sales pipeline as well as an easy access to multiple regions including North America and EU, which has been its core focus.

Risks and concerns

Dependents on top 5 customers for revenues: The substantial portion of its revenue is significantly dependent on only top 5 key customers. For instance, its top five customers for the period ended January 31, 2023 accounted for 83.76 % and for September 08, 2022, and financial years ended March 31, 2022, March 31, 2021 and March 31, 2020 accounted for 100% each of its revenue from operations. Its reliance on a limited number of customers for its business exposes it to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from its key customers, a failure to negotiate favourable terms with its key customers or the loss of these customers, all of which would have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the company. It presently do not have any long-term or exclusive arrangements with any of its customers and it cannot assures that it will be able to sell the services it has historically given to such customers.

Face strong competition: The market for IT services that it operates in is highly competitive, and it expects competition to persist and intensify. The principal competitive factors in its markets are reputation and track record, industry expertise, breadth and depth of service offerings, quality of the services offered, language, marketing and selling skills, scalability of infrastructure, ability to address customers’ timing requirements and price. It faces competition from offshore IT services providers in emerging outsourcing destinations with low wage costs or with a more favourable time zone for US customers as well as competition from large, global consulting and outsourcing firms and in-house IT departments of large corporations. Customers tend to engage multiple IT services providers instead of using an exclusive IT services provider, which could reduce its revenues to the extent that customers obtain services from other competing IT services providers. Customers may prefer IT services providers that have more locations or that are based in countries more cost-competitive or in a more favourable time zone than India.

Operate in rapidly evolving industry: The technology services industry is competitive and continuously evolving, subject to rapidly changing demands and constant technological developments. As a result, success and performance metrics are difficult to predict and measure in its industry. Because services and technologies are rapidly evolving and each company within the industry can vary greatly in terms of the services it provides, its business model, and its results of operations, it can be difficult to predict how any company’s services, including its, will be received in the market. While businesses have been incurring significant expenditure in the past to adopt emerging technologies and related technological trends, there can be no assurance that they will continue to do so in the future.

Outlook

The company is a Digital Technology Services company offering multitude of boutique technology services to both B2B and B2C companies around the world. Its services include Digital Technology Services, DXP (Digital Experience Platforms) Consulting and Implementation Services, Digital projects, custom software development and consulting services, delivering powerful and scalable software systems. On the concern side, the market for IT services that it operates in is highly competitive and it faces competition from offshore IT services providers in emerging outsourcing destinations with low wage costs or with a more favourable time zone for US customers as well as competition from large, global consulting and outsourcing firms and in-house IT departments of large corporations.

The company is coming out with an IPO of 6,32,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 90 per equity share to mobilize Rs 5.69 crore. On performance, the company’s revenue from operations was decreased by 21.73% to Rs 352.21 lakh for the FY 2022 from Rs 449.97 lakh for the FY 2021 due to decrease in revenue in the year FY 2022 by Rs 97.76 lakh on account of covid-19. Profit after Tax decreased by 39.08% to Rs 25.91 lakh in FY 2022 from Rs 42.53 lakh in FY 2021. Going forward, it intends to grow its customer base by continuing to provide products and services in a seamless and integrated technology platform that meets all their business needs. It relies on repetitive orders from the existing clients and references given to the new clients by the existing ones. It intends to continuously update its relationship map, which may lead to new opportunities and creating a base in the IT Industry. It participates in multiple sessions/ seminars/ community gatherings which enables it to interact with the potential leads, thereby increasing its customer base.