Tracxn IPO: Tracxn Tech IPO: Analysts Cautious on Valuations, Investors Exit; should you subscribe?

NEW DELHI: Tracxn Technologies, provider of market intelligence for data analysis, is expected to start its initial public offering (IPO) on Monday, October 10th. Brokerage firms remain cautious on the issue so far, with some suggesting avoidance.

The company will sell its shares in the range of Rs 75-80 per share with a lot size of Rs 185 shares. The issue can be subscribed until Wednesday 12 October. There is no peer company in the listed area that has similar business activities.

Rajnath Yadav, research analyst at Choice Broking, said that Tracxn Technologies is asking for a 12.3x EV/sales multiple at a higher price range, which seems overextended for loss-making deals.

“Given the high turnover rate in the IT-enabled sector and Tracxn’s already double-digit turnover rate, we’re cautiously optimistic about the company’s efforts to reduce labor costs,” he said.

A partial or full exit by PE investors raises concerns about long-term potential growth prospects, the analyst at Choice said in its IPO note, which has an avoidance rating on the issue.

Tracxn Technologies is aiming to raise Rs 309.38 crore through its initial sale of shares, which is fully an Offer to Sell (OFS) of up to 3,86,72,208 shares of R1 par value each by the Company’s founders and existing shareholders .

The promoters – Neha Singh and Abhishek Goyal – along with Flipkart founders Binny Bansal and Sachin Bansal are looking to sell shares in OFS along with India IV, SCI Investments V, Kolluri Living Trust, Milliways Fund and others.

The company will not receive any proceeds from the issue and the entire amount will go to the selling shareholders. The company said it intends to take advantage of the shares’ listing on the stock exchanges.

Nirvi Ashar, Research Analyst at

Broking has raised concerns about intense competition in the industry and a drop in sales if customers don’t renew their subscriptions. However, she is neutral on the subject.

However, she added that the asset-light model and the combination of technology with human analysts are capable of processing massive amounts of data. A diversified customer base and significant cost advantages around the world are a big plus for the company.

The company’s revenue grew at a CAGR of 30.4 percent, she said. “Although revenue has increased, EBITDA and PAT have been negative for the past two years. Investors need to keep an eye on FY23 financials.”

Founded in 2013, Tracxn Technologies provides market intelligence to private companies. The company has an asset-light business model and operates a Software as a Service (SaaS) based platform, Tracxn.

As of June 30, 2022, the platform had 3,271 users across 1,139 customer accounts in over 58 countries, and its customers include several Fortune 500 companies and/or their subsidiaries, the company announced in its DRHP.

For the 2021 financial year, the company recorded a total revenue of Rs.55.74 crore, which was equivalent to Rs.63.13 crore a year ago. The company reported a net loss of Rs.535 crore, down significantly from last year’s net loss of Rs.5403 crore.

Arafat Saiyed, Senior Research Analyst

According to Securities, Tracxn is a key player in providing intelligence data to private companies. It is backed by experienced promoters, a management team and well-known investors.

The price-aggressive IPO leaves little on the table for investors in the medium term, he added, and did not have the brokerage house evaluate the issue.

is the sole Book Running Lead Manager for the issuance while Link Intime India has been appointed Registrar for the issuance. The company’s shares are listed on both the BSE and the NSE.

(Disclaimer: Experts’ recommendations, suggestions, views and opinions are their own. These do not represent the views of Economic Times.)