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Synoptics Technologies 

• Synoptics Technologies is coming out with an initial public offering (IPO) of 22,80,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 237 per equity share.
• The issue will open for subscription on June 30, 2023 and will close on July 5, 2023.
• The shares will be listed on NSE Emerge.
• The share is priced 23.70 times higher to its face value of Rs 10.
• Book running lead manager to the issue is First Overseas Capital.
• Compliance Officer for the issue is Srushthi Nalin Trivedi.

Profile of the company

The company is an IT Services company offering solutions in the areas of IT Infrastructure like connectivity to the Branches, Supply, implementation and support of the network equipment’s needed to run the IT setup like routers, switches etc. It designs the solution for customers who need to put their applications on Cloud. It helps for the application migration and manage the setup in the cloud. IT Security solution like firewall installation and management. Data Centre design and solution with newer technology to optimize the investment and use less space and power and with clearly defined outcomes. Synoptics helps enterprise, small businesses and Government in their Digital journey with various use cases of specific industry verticals with its technology led and innovation driven approach. 

It is currently operating across India and with a team of many employees. It has the ability to provide its B2B (Business to Business) customers with a blend of optimal functionality, value for money, commitment and flexibility (coupled with on-site support across India). The company aims to reduce Total Cost of Ownership (TCO) and increase Return on Investment (RoI) for its customers to adopt any kind of Digital Transformation use case with its technology led and innovation driven approach. Its B2B customers include government entities, public sector undertakings (PSUs), private enterprises.

Proceed is being used for:

• Repayment of certain borrowings.
• Funding additional working capital requirements.
• Investment in strategic acquisition / joint venture.
• General corporate purposes. 

Industry overview

IT infrastructure in technology refers to a set of physical devices, software, network resources and services required to operate enterprise. It allows an organization to deliver IT solutions and services to its employees, partners, and customers. It’s usually internal to an organization and deployed within owned facilities. Besides that, it is also a set of firmwide services including; computing platforms providing computing services, telecommunications services, data management services, application software services, physical facilities management services, and IT management, standards, education, research and development services. If an IT infrastructure is flexible, reliable and secure, it can help an enterprise meet its goals and provide a competitive edge in the market. Alternatively, if an IT infrastructure isn’t properly implemented, businesses can face connectivity, productivity and security issues - like system disruptions and breaches. Overall, having a properly implemented infrastructure can be a factor in whether a business is profitable or not. 

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 utilization can provide employment opportunities to 14 million people and add $380 billion to India's GDP.

As per a survey by Amazon Web Services (2021), India is expected to have nine times more digitally skilled workers by 2025. In November 2021, Mr Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, lauded the Indian IT sector for excelling its competitive strength with zero government interference. He further added that service exports from India has the potential to reach $1 trillion by 2030. 

Pros and strengths

Ability to provide customized and integrated IT solutions: It is an integrated IT services, IT Infrastructure Management, Technical Support Services Outsourcing Company providing a wide range of IT solutions and services to a diverse customer base. It has the ability to provide its B2B customers with a blend of optimal functionality, value of money, commitment and flexibility (coupled with onsite support across India). It provides a range of services throughout the life-cycle of a project. It also provides sector specific solutions such as for Logistics company it connecting their branches with redundancy, so the dispatch in their warehouse is smooth and the order logins from their branch is not affected with an always live network. This helps the logistics company to deliver much efficiently and increase the productivity for BFSI it assist and work very closely in their digital initiatives be it branch automation with IT, or the datacentre solution, core banking requirement, banking enablement though IT, End to end managed service. Its services include, among other things, the provision of hardware, software and managed services which enables it to closely work with its customers to understand their industry-specific business needs and develop customised and comprehensive IT solutions to address such needs in a cost-effective and timely manner.

Quality of Services: The Company has been accredited with ‘ISO 27001: 2013’, ‘ISO/ IEC 20000-1:2018’ and ‘ISO 9001: 2015’ certification for providing network managed service, IT infrastructure management service, Data center management services, video conferencing service, system integration service, network integration service, CCTV surveillance service, NOC and SOC service, Cloud service, Wireless and WIFI Service. It adheres to quality standards as per industry standards; hence it gets repetitive work order from its customers, as it is capable of meeting their quality standards at competitive costs, which enables it to maintain its brand image in the market. 

Technically qualified personnel: It has a strong pool of technically qualified personnel, comprising 584 employees, including 515 engineers as of December 31, 2022. Its employees are strategically located across India with the capability of providing on-site support and services to its customers. It considers that this capability gives it a broader geographical coverage than several of its competitors and is particularly advantageous for large, multi-location projects for customers in both the public and the private sectors. Its pan-India presence drives its capability to deliver both off-site and on-site services as part of its IT solutions depending on the nature of the project and the needs of its customers.

Risks and concerns

Dependent on top 10 customers: Revenue from its top 10 customers constituted 82.99% and 82.77% of its revenue from operations for period/ year ending December 31, 2022 and March 31, 2022 respectively. It do not have firm commitment supply agreements with most of its customers and other terms of its services and solutions. The loss of any significant client would have a material effect on its financial results. It cannot assures that it can maintain the historical levels of business from these clients or that it will be able to replace these clients in case it lose any of them. While it is constantly striving to increase its customer base and reduce dependence on any particular customer, there is no assurance that it will be able to broaden its customer base in any future periods or that its business or results of operations will not be adversely affected by a reduction in demand or cessation of its relationship with any of its major customers.

Dependent on number of Key Personnel: It is dependent upon the collective services of all the members of the company's senior management team, including, among others, its Promoters and Directors, who oversee its day-to-day operations, strategy and growth of its business, managers and onboard officers. The loss of or inability to attract or retain, the services of any of these persons or several of these persons could have an adverse effect on its business. In particular, the expertise, experience and services of its Promoter and other members of its senior management team, including its Key Management Personnel helps it to execute its growth strategy and have been integral to its business.

Rapid technological changes: The IT solutions market is characterised by rapid technological changes, evolving industry standards, changing customer preferences and new product and service introductions. Its future success will depend on its ability to anticipate these advances and develop new service offerings to meet customer needs. It may fails to anticipate or respond to advances in technology or changes in industry standards in a timely or cost-effective manner or, if it do respond, the solutions or technologies it develop may fail in the marketplace. Furthermore, it’s some of its competitors such as Dynacons Systems & Solutions Ltd, Ishan Infotech Ltd, Syndrome Technologies Pvt Ltd, NTT India Pvt Ltd, Kyndryl Solutions Pvt Ltd etc. may respond faster than it to changes in technology, industry standards and customer preferences.

Outlook

The company is an IT Services company offering solutions in the areas of IT Infrastructure like connectivity to the Branches, Supply, implementation and support of the network equipment’s needed to run the IT setup like routers, switches etc. It designs the solution for customers who need to put their applications on Cloud. On the concern side, it do not have firm commitment supply agreements with most of its customers and other terms of its services and solutions. The loss of any significant client would have a material effect on its financial results. Besides, it is dependents upon the collective services of all the members of the company's senior management team, including, among others, its Promoters and Directors, who oversee its day-to-day operations, strategy and growth of its business, managers and onboard officers.

The company is coming out with an IPO of 22,80,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 237 per equity share to mobilize Rs 54.03 crore. On performance front, the total income of the company for fiscal year 2022 was Rs 5097.07 lakh against Rs 3479.91 lakh total income for Fiscal year 2021. An increase of 46.47% in total income was due to increase in Sales. Profit after tax for the Fiscal 2022 was at Rs 432.36 lakh against profit after tax of Rs 236.02 lakh in fiscal 2021, an 83.18% increase. Going forward, it intends to continue investing in physical and technological infrastructure to support its sales operations and to increase its productivity. To enhance its ability to hire and successfully deploy increasingly greater numbers of technology professionals, it intends to continue investing in recruiting, training and maintaining a challenging and rewarding work environment.