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Austere Systems

• Austere Systems is coming out with an initial public offering (IPO) of 28,30,000 equity shares in a price band of Rs 52-55 per equity share.
• The issue will open on September 3, 2025 and will close on September 8, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 5.20 times of its face value on the lower side and 5.50 times on the higher side.
• Book running lead manager to the issue is GYR Capital Advisors.
• Compliance Officer for the issue is Shampa Juneja.

Profile of the company

Founded in 2015, Austere Systems specializes in an extensive array of services, including software development, Software as a Service (SaaS), mobile application development, information technology solutions, database management, IT enabled services, training and development, web development, web and portal operations, e-commerce platforms, ERP and MIS solutions, Data Analytics and AI Services, Process automation, Digital Transformation as well as data and document management storage.

The company also engages in reselling software products and providing business process outsourcing and knowledge management solutions, alongside IT consulting and advisory services. Strategically, it focuses on global and Indian clients in which it serves both private and in government sector, in which it serves the largely underserved rural markets in India - an area often overlooked by other IT firms. By forging collaborative partnerships with state governments and gram panchayats across various regions, it is dedicated to delivering customized IT solutions that effectively address the unique needs and challenges faced by these communities. The company is an AWS public partner to provide cloud services to its clients.

The company’s Board of Directors includes a combination of management executives and directors who bring in significant technology, business consulting, business operations and management expertise. It is led by professional management team with extensive experience in the IT Services industry for vast technology-stack, in-depth understanding of managing complex projects and proven performance track record for handling big clients.

Proceed is being used for:

• Funding the working capital requirements of the company
• 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 GDP in FY22, and it is expected to contribute 10% to India’s GDP by 2025. India's IT industry is likely to hit the US$ 350 billion mark by 2026 and contribute 10% towards the country's gross domestic product (GDP), Info metrics Ratings said in a report. The Indian IT industry’s revenue touched $227 billion in FY22, a 15.5% YoY growth and was estimated to have touched $245 billion in FY23. As per a survey by AWS (2021), India is expected to have nine times more digitally skilled workers by 2025. This indicates that a total of 3.9 billion digital skill trainings are expected by 2025. India will need 30 million digitally skilled professionals by 2026.

The IT industry added 4.45 lakh new employees in FY22, bringing the total employment in the sector to 50 lakh employees. India’s technology industry is on track to double its revenue to $500 billion by 2030. Direct employment in the IT services and BPO/ITeS segment is estimated to reach 5.4 million in FY23 with an addition of 290,000 people. The IT-BPM services revenue reached $194 billion in FY21. In 2022, the Indian domestic IT & Business Services market was valued at $13.87 billion and recorded a 7.4% year-over-year (YoY) growth as compared to 7.2% in 2021.

IT sector for excelling in its competitive strength with zero government interference. He further added that service exports from India had the potential to reach $1 trillion by 2030. Spending on information technology in India is expected to reach $144 billion in 2023. The cloud market in India was expected to grow three-fold to $7.1 billion by 2022 with the help of growing adoption of big data, analytics, artificial intelligence and the Internet of Things (IoT), according to Cloud Next Wave of Growth in India report. India’s digital economy is estimated to reach $1 trillion by 2025. Artificial Intelligence (AI) is expected to boost India's annual growth rate by 1.3% by 2035, according to NITI Aayog. The Karnataka government signed three MoUs worth $13.4 million to help the state's emerging technology sector.

Pros and strengths

Global and domestic client base from different set of industries: With over a hundred clients worldwide, the company takes pride in maintaining strong client connections. Its steady track record of successful project execution and client satisfaction makes it as a trusted technological partner. The company’s business approach, which is based on technical competence, results-oriented solutions, flexibility, and open communication, is critical to its success. Cross-domain competencies enable it to deliver bespoke solutions that are matched with client needs, resulting in measurable ROI.

Comprehensive service and in-house product portfolio: The company’s extensive service portfolio includes web-application development, real store operation applications, proof of concepts, RFP creation, process automation, manual and automation testing, cloud computing, and platform deployment. This wide array of offerings enables the company to meet diverse technological needs, providing tailored solutions that drive business efficiency and innovation. The company’s in-house products further enhance its service portfolio, demonstrating the company’s commitment to providing specialized solutions for various industries. These products include the Election Monitoring System, Retail PoS Software & Mobile Application used at HAFED stores, Litigation Management System, and Social Media Tracing -D2P2 analysis (Descriptive/Diagnostic & Predictive/Perspective). Each product is designed to address specific business challenges, offering robust and innovative tools that help organizations streamline operations, improved decision-making, and achieve their strategic goals.

Scalable business model: The company’s business model is highly scalable due to its dual revenue streams from multiple service-driven offerings, in-house products. The service-driven revenue comes from providing tailored IT solutions to clients across various industries, allowing the company to adapt to the specific needs of different markets. In India, particularly in rural areas, company's service-driven approach involves collaborations with state governments and gram panchayats to implement IT solutions that cater to local needs. Globally, this model can be replicated in other regions, scaling its service offerings to meet diverse demands. 

Risks and concerns

Maximum revenue comes from limited customers: The company’s top ten customers contribute 55.49%, 74.69%, and 77.34% of its total sales for the Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. Its business heavily relies on its customer base, and the potential loss of any of its customers could have a negative impact on its sales and, consequently, its overall business and financial performance. If it was to lose one or more of its significant or key customers or experience a reduction in the volume of business they provide, it could result in adverse consequences for its business, financial health, and cash flow.

Dependent upon the experience and skill of management team: The company is dependent on a highly qualified, experienced and capable management team for design and execution of its projects. Its ability to meet continued success and future business challenges depends on its ability to attract, recruit and retain experienced, talented and skilled professionals. The loss of the services of its key personnel or its inability to recruit or train sufficient number of experienced personnel or its inability to manage the attrition levels in different employee categories may have an adverse effect on its financial results and business prospects.

Length of sales cycle may fluctuate significantly: Implementing its products and any related services may entail a significant commitment of resources by prospective customers, accompanied by the risks and delays frequently associated with significant technology implementation projects. Such delays and fluctuations could cause its revenues and results of operation to fluctuate significantly across time periods, and it may not be able to adjust its costs quickly enough to offset such lower revenues, potentially adversely impacting its business, operating results and financial condition.

Outlook

Austere Systems is a software development company specializing in IT services and solutions for startups and enterprises. The company specializes in software development, SaaS, mobile apps, IT solutions, database management, training, e-commerce, ERP, AI services, process automation, digital transformation, and data/document management. The Company ensures businesses stay competitive by rapidly adapting to and leveraging the latest technological advancements. The company has comprehensive service and in-house product portfolio. On the concern side, the length of the company’s sales cycle may fluctuate significantly and depends on several external factors which may result in significant fluctuations in its revenue. Moreover, the company may face difficulty in hiring skilled staff for its smooth operations. 

The company is coming out with a maiden IPO of 28,30,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 52-55 per equity share. The aggregate size of the offer is around Rs 14.72 crore to Rs 15.56 crore based on lower and upper price band respectively. On performance front, the revenue from operations of the company for Fiscal year 2025 was Rs 18,62,051.23 hundreds as against Rs 18,56,571.23 hundreds for Fiscal year 2024, a marginal increase of 0.30% in revenue from operations. This increase was due to more workflow from existing clients and acquisitions of new clients. Moreover, profit after tax for the Fiscal 2025 were at Rs 4,01,325.53 hundreds against profit after tax of Rs 4,14,526.71 hundreds in Fiscal 2024, a decrease of 3.18%. This decrease was due to increase in finance cost and increase in other expenses.

The company has built strong ties with its clients throughout the years. It focuses on researching and consulting with customers to better understand their behaviour, preferences, and trends. It feels that this provides it a unique perspective on its engagements. It aspires to become an integral part of its customer’s growth plan, providing services across many touchpoints and projects. It aims to create innovative solutions and products for undeserved industries and untapped markets like rural governments. It aims to provide specialized services for each stage of the software product life cycle to support customers throughout the whole development process. In addition, it wants to provide its clients with onsite professional services and advising to help them as they roll out their products to end consumers. It wants to expand its business partnerships with worldwide companies to better serve local clients.