Enfuse Solutions Limited IPO - Review & Fundamental Analysis
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Enfuse Solutions Limited IPO

Enfuse Solutions is coming up with an IPO worth INR 22.44 crores, consisting of a fresh issue of 23.37 lakh shares. The company plans to utilize the funds raised to repay the borrowings and to meet the working capital requirement. 

Enfuse Solutions IPO – Important Details

Enfuse Solutions IPO DateMarch 15, 2024 to March 19, 2024
Enfuse Solutions IPO Listing DateMarch 22, 2024
Enfuse Solutions IPO PriceINR 91 to 96 per share
Enfuse Solutions IPO Lot Size1200 Shares
Enfuse Solutions IPO Total Issue SizeINR 22.44 crores
Enfuse Solutions IPO Basis of AllotmentMarch 20, 2024
Enfuse Solutions IPO Initiation of RefundsMarch 21, 2024
Enfuse Solutions IPO Credit of Shares to DematMarch 21, 2024
Enfuse Solutions IPO Issue TypeBook Built Issue IPO
Enfuse Solutions IPO Listing AtNSE SME

Enfuse Solutions Limited IPO- Company Profile

The company is engaged in the business of providing integrated Digital solutions across various domains including (i) In Data Management & Analytics (ii) E-commerce & Digital Services (iii) Machine Learning & Artificial intelligence (iv) Edtech & Technology Solutions. The company provides these service solutions by combining custom-designed data processes, delivery teams that include both generalists and domain specialists, and its in-house software to streamline and automate various processes. 

The business operations encompass various domains (i) In Data Management & Analytics, the organize and analyze data, providing tailored insights for informed decision-making such as Master data Management, Product Information Management, etc. (ii) E-commerce & Digital Services form a core area where the company develops and optimizes digital platforms for seamless online experiences such as E-commerce platform management, content management, Digital marketing etc. (iii) Machine Learning & AI represent the capabilities in advanced technologies, offering innovative solutions such as tagging/labeling, Transcription, Annotation, etc. (iv) Edtech & Technology Solutions focus on leveraging technology to enhance educational experiences and overall technological solutions such as live Proctoring, Record and review, Student Counselling etc. 

The company works as a consultant for the clients as per the terms of sub-contracting agreements entered with them. E.g., if the client is desirous of providing digitization services to one of its customers, then, as consultants will work on behalf of the client to provide said services to their customers.

Enfuse Solutions IPO  – Fundamental Analysis

Enfuse Solutions Ltd’s IPO reveals steady revenue growth, substantial profitability, and equity increases, alongside higher leverage and fluctuating liquidity, positioning it as an attractive but cautiously considered investment in its evolving market sector.

Revenue Growth:

There’s a steady increase in revenue from ₹2,554.12 lakhs in FY2022 to ₹2,803.29 lakhs by December 2023, indicating consistent market demand for its services or products.

Equity Growth:

Equity has nearly tripled, showcasing strong investor confidence and potentially effective capital management to fuel expansion.

Profitability:

Profit after tax has significantly improved, underscoring the company’s operational efficiency and increasing profitability. The RoNW has impressively risen to 55.85%, highlighting efficient equity utilization.

Diluted EPS and NAV:

The EPS and NAV per equity share have shown parallel growth, which is positive for potential investors assessing the company’s per-share value.

Asset and Liability Management:

Total assets more than doubled, reflecting business expansion and asset accumulation. However, the liabilities have also seen a significant increase, influencing the debt-equity ratio, which suggests a return to higher leverage by December 2023.

Liquidity:

The current ratio experienced fluctuations, indicating varying levels of liquidity. A current ratio of 0.97 by December 2023 points to tighter liquidity compared to March 2023.

Enfuse Solutions Ltd IPO Financial Information

ParticularAs of 31 March 2022As of 31 March 2023As of 31 December 2023
Revenue (₹ in lakhs)2,554.122,609.852,803.29
Equity (₹ in lakhs)354.72647.45969.95
Expenses (₹ in lakhs)2,287.782,213.662,371.56
Profit and Loss After Tax (₹ in lakhs)198.11292.73322.50
RoNW (%)33.25%45.21%55.85%
Diluted EPS only (₹)3.044.504.95
NAV per Equity Share (₹)3.044.504.95
Total Assets (in lakhs)889.801,164.712,547.23
Total Liabilities (in lakhs) 535.18517.261,577.28
Debt Equity Ratio (in times) 0.660.370.93
Current Ratio (in times) 0.811.830.97

Enfuse Solutions Ltd IPO Peer Comparison

Enfuse Solutions Ltd shows robust performance with a RoNW of 45.21% and an EPS of 4.50 on revenue of ₹2610.42 lakhs, outpacing peers like Vertexplus Technologies and Systango Technologies in profitability and efficiency, while trailing eClerx Services in revenue but leading in RoNW.

CompanyTotal Revenue (₹ in lakhs)EPS Face Value (₹)RoNW (%)
Enfuse Solutions Limited2610.424.501045.21%
Vertexplus Technologies Limited2171.274.71108.36%
eClerx Services Limited 2,71,384.8097.151028.50%
Systango Technologies Limited5369.7312.761022.70%

Enfuse Solutions Limited IPO Objective

The main objective is to repay company borrowings totaling INR 9.05 crores, utilizing approximately Rs. 3.83 crores from IPO proceeds. Additionally, INR 10.50 crores from IPO proceeds will address working capital needs.

  1. To repay the borrowings of the company: As of December 31, 2023, the total outstanding of the company is INR. 9.05 crores. The company proposes to utilise an estimated amount of Rs. 3.83 crores from the net proceeds to repay the borrowing availed by the Company.
  1. To meet working capital requirements: The business requires working capital majorly for investment in trade receivables, inventories, and payment to trade payables and funding day-to-day operations. The Company will meet the requirement to the extent of INR 10.50 crores from the net proceeds of the IPO and balance from borrowings at an appropriate time. 

Enfuse Solutions Ltd IPO Risks And Challenges

Enfuse Solutions Limited’s IPO faces risks from reliance on US and Netherlands markets, susceptible to adverse developments. Exchange rate fluctuations could impact operations. Failure to innovate technologically may harm business. Success hinges on skilled workforce retention.

  1. The company derives a significant portion of its revenues from clients located in the United States of America and Netherlands and any adverse developments in these markets could adversely affect the business.  
  1. Exchange rate fluctuations may adversely affect the results of operations as significant portion of the revenues and some portion of the expenditure is denominated in foreign currencies. 
  1. The business will suffer if the company fails to anticipate and develop new services and enhance existing services to keep pace with rapid changes in technology.
  1. The company’s success depends largely upon its skilled professionals and its ability to attract and retain personnel. The industry where the company operates is a highly skilled and technical employee-intensive industry.

Enfuse Solutions IPO  – Industry & Market Potential

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. 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 current emphasis is on the production of significant economic value and citizen empowerment, thanks to a solid foundation of digital infrastructure and enhanced digital access provided by the Digital India Programme. India is one of the countries with the quickest pace of digital adoption. This was accomplished through a mix of government action, commercial innovation and investment, and new digital applications that are already improving and permeating a variety of activities and different forms of work, thus having a positive impact on the daily lives of citizens. India’s rankings improved six places to the 40th position in the 2022 edition of the Global Innovation Index (GII).

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. 

Enfuse Solutions IPO – Type of Offer

Enfuse Solutions is launching an IPO valued at INR 22.44 crores, comprising 23.37 lakh new shares. The company intends to use the proceeds to repay debts and address working capital needs.

Enfuse Solutions Ltd IPO Offer Size

The offer size of Enfuse Solutions Limited’s IPO is  INR 22.44 crores. The net proceeds will be used to repay the borrowings and to meet working capital needs.

Enfuse Solutions IPO Allotment Structure

Enfuse Solutions’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. A portion of the offer is reserved for market makers.

Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

Market Makers Reservation: A portion of the issue up to 1,20,000 shares is reserved for market makers. 

How to apply for an Enfuse Solutions Limited IPO?

To apply for the Enfuse Solutions IPO through Alice Blue, you would typically follow these steps:

Open a Demat and Trading A