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Identixweb

• Identixweb is coming out with an initial public offering (IPO) of 30,80,000 equity shares in a price band Rs 51-54 per equity share.
• The issue will open on March 26, 2025 and will close on March 28, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 5.1 times of its face value on the lower side and 5.4 times on the higher side.
• Book running lead manager to the issue is Beeline Capital Advisors.
• Compliance Officer for the issue is Pooja Shah. 

Profile of the company

The company, as an IT firm, is involved in providing Software as a service (SAAS) - based digital product solutions. The company offers E-Commerce Store Development, Web App Development, UI/UX Design, Website development, Customize Software Development, support and maintenance with a primary focus on Shopify application development. The primary goal of the company is to deliver applications online, eliminating the need for installation and maintenance. This approach simplifies software management. Its products include many Shopify applications that are conversion-optimized and tailored made to meet customer needs. It provides its products and services worldwide across a wide range of sectors.

The company specializes in Shopify application development, which focuses on creating applications that enhance the functionality and performance of Shopify stores. These applications can range from tools that improve store management and customer engagement to features that optimize sales and streamline operations. Shopify is a leading e-commerce platform that powers over a million businesses worldwide. Its flexibility and scalability make it an ideal choice for businesses of all sizes. However, to truly maximize the potential of a Shopify store, merchants often need custom applications that cater to their specific needs. Its extensive experience and deep understanding of the Shopify platform enable the company to deliver top-tier Shopify solutions. It is committed to ensure that all its services are executed with the highest level of precision and customer satisfaction. Its dedication to excellence has earned the company a reputation for delivering innovative, reliable, and efficient Shopify solutions that help merchants achieve their business goals.

Proceed is being used for:

• Investment in marketing to support organization’s growth plans in India or Outside India
• Investment into market research and product development through Talent Hiring for the issuer company
• Investment in its subsidiary i.e., Munim ERP Private Limited for product development through talent hiring
• 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 7.5% of India’s GDP in FY23, and it is expected to contribute 10% to India’s GDP by 2025. As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest Internet rates, with 76 crore citizens now having access to the Internet.

The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling $138.6 billion up from $124.7 billion last year. The 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 IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling $138.6 billion up from $124.7 billion last year. India’s public cloud services market grew to $3.8 billion in 1H2023, expected to reach $17.8 billion by 2027. By 2026, widespread cloud utilisation can provide employment opportunities to 14 million people and add $380 billion to India's GDP.

Pros and strengths

Tailored solutions: The company possesses extensive experience and expertise in Shopify app development. Its team specializes in crafting custom web applications that enhance the functionality, performance, and user experience of online stores, helping merchants maximize their potential and streamline their operations.

Client-centric approach: The company prioritizes its clients’ needs and success above all else. Its client-centric approach involves thoroughly understanding their business goals and challenges, enable the company to deliver customized solutions that drive growth and efficiency. It is committed to building long-term relationships founded on trust, transparency, and mutual success.

Comprehensive development services: The company provides a wide range of development services beyond Shopify, through Node.js, PHP, and React.js development. This extensive array of services allows the company to meet diverse client needs and deliver integrated solutions that drive business growth.

Risks and concerns

Dependent on few numbers of customers: Its top ten customers contribute 99.18%, 99.66%, 100.00%, and 100.00% of its total revenue from operations on standalone basis for the period / year ended on September 30, 2024, March 31, 2024, 2023 and 2022, respectively. Its business operations are highly dependent on its customers and the loss of any of its customers may adversely affect its sales and consequently on its business and results of operations.  s. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows.

Failure to offer customer support in timely: From time to time, its customers require its customer support team to assist them in using its services, help them in resolving post-deployment issues quickly and in providing ongoing support. If it does not devote sufficient resources or are otherwise unsuccessful in assisting its customers effectively, it could adversely affect its ability to retain existing customers and could prevent prospective customers from adopting its services. It may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. It also may be unable to modify the nature, scope and delivery of its customer support to compete with changes in the support services provided by its competitors. Increased demand for customer support, without corresponding revenue, could increase costs and adversely affect its business, results of operations and financial condition.

Intense competition: It operates in an intensely competitive industry that experiences rapid technological developments, changes in industry standards, and changes in customer requirements. Its competitors include large IT consulting firms, captive divisions of large multinational technology firms, large Indian IT services firms, in-house IT departments of large corporations, in addition to numerous smaller local competitors in the various geographic markets in which it operates. The technology services industry is experiencing rapid changes that are affecting the competitive landscape. It may faces competition from companies that increase in size or scope as the result of strategic mergers or acquisitions, which may result in larger competitors with significant resources that benefit from economies of scale and scope.

Outlook

Incorporated in 2017, the company, as an IT firm, is involved in providing Software as a service (SAAS) - based digital product solutions. The company offers E-Commerce Store Development, Web App Development, UI/UX Design, Website development, Customize Software Development, support and maintenance with a primary focus on Shopify application development. On the concern side, majority of its revenues are generated from single customer Shopify Inc. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations. Meanwhile, if it does not successfully anticipate market needs or develop and introduce new solutions that meet users’ needs on a timely basis, it may not be able to compete effectively and its revenue, reputation, financial conditions, results of operations and cash flows may be adversely affected.

The company is coming out with a maiden IPO of 30,80,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 51-54 per equity share. The aggregate size of the offer is around Rs 15.71 crore to Rs 16.63 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operation increased from Rs 622.11 lakh in FY 2022-23 to Rs 632.90 lakh in FY 2023-24, showing increase of 1.73%. Moreover, the profit after tax increased by 106.22% from Rs 137.67 lakh in FY 2022-23 to Rs 283.90 lakh in FY 2023-24.

Going forward, over the years, it has built long-lasting relationships with its customers. It invests considerable effort in understanding their behaviour, preferences, and trends through research and consultation. This process gives it a unique perspective in its engagements. Additionally, it conducts regular market scans to identify emerging technologies and solutions. With this approach, it aims to become an integral part of its customers' operating and growth strategies, enabling it to support them across multiple touchpoints and projects. It focuses on expanding its relationships with existing customers by helping them solve new challenges and become more engaging, responsive, and efficient. Its track record demonstrates its ability to extend its work with customers beyond initial engagements.