Innovative Ideals and Services IPO Review

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Innovative Ideals and Services IPO

6.9

Company Background

6.5/10

Price Band

7.5/10

Financial Health

7.0/10

Industry Situation

6.5/10

IPO Proceeds Usage

7.0/10

Pros

  • Wide Range of Products & Services
  • Regular Tech Updates
  • IPO Proceeds to be Used as Working Capital

Cons

  • Sudden Improvement in Financials
  • Limited Exposure to some of its products

Innovative Ideals and Services (India) Limited Basic Details

 

Innovative Ideals and Services (India) Limited Background

The company was founded on December 6, 2000, by Maqsood Shaikh and Tazyeen Shaikh at Mumbai in Maharashtra.

When the company began its operations, it was involved in the trading of different varieties of security equipment by importing them from Korea. Now the company has become Security Solution provider as well and is engaged in providing services of System Integration for security, safety and building automation and installation of different electronics systems.

The company mainly caters to the B2B segment and targets the needs of the residential construction industry and provides a big range of services like Video Door Phone, CCTV Systems, Fire Alarm Systems, Audio Door Phone, Access Controls, etc. Innovative Ideals and Services (India) has developed 2 products for the safety needs of the people which are called “Savior” and “ArmHer” for reaching the B2C segment.

The company uses the brand names “Onyx” and “Inok” for Video Door Phones and “eHomes” for home automation solutions. It is also the authorised distributor of FERMAX Electronica S.A.U. for distribution of their products FERMAX Audio/Video Door Entry System in India.

The company has also signed agreements with Tata Sky Broadband Pvt Limited for providing broadband and related services in a particular area in Pune for a tenure of 5 years. The company is also the authorised distributor of Tata Sky D2H services for the same area and time period.

The company’s registered office is at Goregaon in Mumbai and branch offices in Pune. Both the warehouse facilities of the company are located in Mumbai.

The business is now coming up with an SME IPO in the next few days and in this detailed review, we will talk about different facts related to this IPO. Hopefully, by the end of this review, you will be able to make up your mind whether you should be going ahead with this IPO or not.

Innovative Ideals and Services IPO Data Points

Innovative Ideals and Services IPO will open on September 24, 2018 and close for subscription on September 26, 2018. The IPO size will be of 30.66 lakh Equity shares and the face value of each share will be ₹10. The price band has been set at ₹36 – ₹40 per equity share.

The offer price includes a premium of up to ₹26 – ₹30 and is up to 4 times the face value of the equity shares. 29.10 equity lakh will be reserved for retail allocation. The IPO size is expected to be up to ₹11.04 crores – ₹12.26 crores.

The market lot size is of 3000 equity shares and the shares will be listed on the SME exchange of the Bombay Stock Exchange or BSE.

Pursuant to a resolution passed on September 22, 2017, the fresh issue has been authorised by the Board of Directors and pursuant to a special resolution of the shareholders at the Annual General Meeting held on September 25, 2017, the offer has been approved by them.

Innovative Ideals and Services Financial Performance

The total revenues of the company increased by 89.09% to ₹2,031.84 lakhs in fiscal 2018 from ₹1074.57 lakhs in fiscal 2017 due to an increase in the sale of products in the domestic market by 124.9%.

 

The profit after tax or PAT significantly increased by 219.13% to ₹308.79 lakhs for the financial year ended March 31, 2018, from ₹96.76 lakhs for the financial year ended March 31, 2017.

The sudden increase in PAT raises concerns and is yet to be seen if the company is able to maintain such high growth rate in profits in the future years. The return on net worth of the company for the years ended March 31, 2018, March 31, 2017, and March 31, 2016, is 23.1%, 14.26% and 0.23% respectively.

Innovative Ideals and Services IPO Objectives

The main objectives of the Innovative Ideals and Services IPO are as follows:

  • For funding of the working capital requirements of the company
  • For meeting expenses related to the general corporate operations.

Other than the above-mentioned objectives, the company will also benefit in terms of enhanced corporate image, brand name and increased visibility through Innovative Ideals and Services IPO.

Innovative Ideals and Services IPO Events

Innovative Ideals and Services (India) Limited filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on September 4, 2018, for the 100% book built IPO. The offer will open on September 24, 2018, and close on September 26, 2018.

The finalisation of basis of allotment is expected to happen by October 1, 2018, and the initiation of refunds is expected to start by October 3, 2018. The transfer of shares to demat accounts is expected to start on October 4, 2018 and the expected listing date will be October 5, 2018.

Innovative Ideals and Services IPO Recommendation

Now let us analyse some of the key strengths and risks related to the company before deciding whether to invest in Innovative Ideals and Services IPO or not.

One of the biggest strengths of the company is its highly experienced management team which has contributed to making a strong network of clients and developing cordial relationships with suppliers.

Another major strength of the company is their focus on good quality of after Sales Service which is provided at competitive prices to their clients.

Also, the company is engaged in providing a wide range of products and services in order to serve specific customer requirements.

The company also tries to remain updated with the advance in technologies. By focusing on the technological requirements of their customers, they try to develop and design the best possible products and services. The company has also developed promising strategies for further growth and expansion of the business.

Now, let us look at some of the business-related risk factors.

The company is involved in certain civil and tax-related legal proceedings and any adverse ruling in them may pose a risk to the overall profitability of the company.

The statutory auditor of the company has given some adverse remarks in the restatement of financial statements.

Dependence on third parties for the manufacturing of their products. Some of the clients of the company belong to the real estate and construction industry. Any adverse effects in these industries may also have a negative effect on revenues and the profitability of the company.

The company has not been able to market some of its products effectively like ArmHer, Innoeye and Savior. If this continues, the business operations may be affected negatively.

The market for basic features mobile phones is decreasing in India exponentially because of which their brand “Inoyo” is exposed to the risk of less demand due to which the overall profitability of the company may be hampered.

If the company is unable to update itself with modern technology and constantly develop new products according to the needs of the clients, it may suffer some loss of market share.

The company is also exposed to the risk of technical defects in its products which can have a negative impact on the reputation of their brand image and overall profitability.

It has not complied with some statutory provisions under Companies Act because of which certain penalties can be imposed on it. The sudden jump in PAT in the last fiscal as compared to the previous one is a cause for concern.

After looking at various aspects of the company, it can be said that investors should remain cautious and may invest in the Innovative Ideals and Services IPO for long-term gains.

In case you are looking to move ahead with an investment in this IPO, then let us assist you in taking the next steps ahead. Just fill in some basic details in the form below:

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Innovative Ideals and Services (India) Limited Management Information

Currently, there are 6 Directors on the Board of Innovative Ideals and Services (India) Limited. Maqsood Shaikh is the Promoter and Managing Director of the company.

He did his diploma in Telecommunication Engineering from Board of Technical Examinations, Bangalore, Karnataka. Since 1994, he has been associated with the electronic security industry.

Innovative Ideals and Services IPO Advisors Information

Pantomath Capital Advisors Private Limited is acting as Book Running Lead Manager to the issue. Bigshare Services Private Limited is acting as the Registrar for the Innovative Ideals and Services IPO.

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