Ivalue Infosolutions Limited (Avoid)

Highlights

Ivalue InfoSolutions Limited (Ivalue) incorporated on 2008 and they are an enterprise technology solutions specialist based out of India, offering comprehensive, purpose-built solutions across 4 business segments (i) Cybersecurity (ii) Information Lifecycle Management (iii) Data centre infrastructure (iv) Associated professional and managed services, for securing and managing digital applications and data.

Ivalue primarily serve large enterprises in their digital transformation by understanding their needs and working with System Integrators and OEMs to identify, recommend and deploy solutions meeting their requirements, aimed at ensuring performance, availability, scalability and security of digital applications and data.

The company help enterprise customers navigate the technology solutions and associated services market, leveraging own experience in designing and deploying solutions for enterprise customers in the past, and technical expertise in these domains supported by a skilled and trained workforce.

Ivalue also offer technical expertise and a wide range of associated services to System Integrators, enterprise customers and OEMs. Services to System Integrators and enterprise customers mainly include multi-OEM professional and technical services, implementation and support, 24×7 managed services covering IT infrastructure, cyber security and enterprise service management functions.

Out of the total proceeds of Rs. 5,603 mn, ~Rs. 5,630 mn would go towards existing promoter selling shareholders and existing individual investors selling shareholders of the company. As the company expects that the proposed listing of its Equity Shares will enhance their visibility and brand image.

Key Highlights

• Total Addressable Market (TAM) for Ivalue businesses is expected to grow from ~USD 1,076 bn in 2024 to USD 3,380 bin by 2030, with a CAGR of 21 pct during this period. In India, the total TAM of these markets is also on the rise, growing at a faster rate, with a CAGR of 23 pct from 2024 to 2030. Total TAM is anticipated to grow from USD 22.7 bn in 2024 to USD 78.9 bn by 2030.
• Ivalue strategically add OEMs that align with focus areas and complement existing portfolio of OEMs, to address evolving technology trends relevant to System Integrators and enterprise customers. Ivalue agreements with leading OEMs, including Check Point, Forcepoint, Hitachi, Tenable, Yubico, Imperva, and Arista. In line with focus on expanding ALM and cloud offerings, they have also recently partnered with marquee OEMs such as Splunk, Nutanix and Google Cloud.
• By focusing on a diversified channel strategy, across Global, National and Local System Integrators, Ivalue have been successful in generating a healthy revenue mix and also in capturing a wider end-customer base. The Global and National System Integrators, along with focused accounts practice, help Ivalue serve large transactions, whereas the Local System Integrators provide them with a wide market coverage.
• Ivalue has a strong presence in India, with offices across eight locations in India, including Registered and Corporate Office in Bangalore, India. Further, they are also present in other SAARC regions, with offices in Bangladesh and Sri Lanka. Through their team in Bangladesh, which is headquartered in Singapore. Ivalue also cater to Bhutan and Nepal markets.
• VELL’s key growth strategies includes (i) Capitalize on the growth in enterprise technology solutions market in India and SAARC region (ii) Expand OEM, System Integrator and end-customer portfolio, and leverage existing relationships to generate cross-sell and up-sell opportunities (iii) Focus on growing ALM offerings, to leverage increased market focus on digitization and cloudification of applications (iv) Focus on growing hybrid cloud offerings, to capture expected growth in hyperscale and hyper converged infrastructure for hybrid cloud needs.
• The sales/EBITDA/profit of the company have grown 7.6 pct CAGR/20.6 pct CAGR/19.3 pct CAGR over FY23-25. In FY25 sales of the company stood at Rs. 9,227 mn, rose 18.3 pct YoY. EBITDA of the company increased 16.3 pct YoY to Rs. 1,291 mn while margins contracted 20 bps YoY to 14 pct. Profit came at Rs. 853 mn, grew 20.9 pct YoY.

Key Risk

• Agreements with OEMs and system integrators are mostly short-term and non-exclusive, which can be terminated without cause, creating sudden business uncertainty.
• Any adverse macroeconomic or sector trends (such as reduced IT spending) can harm growth and profitability.
• Intense competition from large value-added distributors and technology resellers could affect growth and margins.

Financial Performance

Valuation

Ivalue InfoSolutions Limited (Ivalue) is well-positioned to capitalize on the growth in the Indian enterprise technology solutions market, considering their role in the value chain, proven ability to understand the technical and business requirements of end customers, and expertise in curating, deploying, and maintaining customized, purpose-built solutions to meet those requirements, working along with leading System Integrators and OEMs. At the upper end of the price band of Rs. 299, the issue is priced at a PE of 18.8x its FY25 earnings on post issue equity capital. The issue appears to be fully priced. One can avoid this issue.

Disclaimer: The views shared in blogs are based on personal opinions and do not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Advisor before making any investment using the app. Making an investment using the app is the investor’s sole decision, and the company or its communication cannot be held responsible for it.