Capillary Technologies has filed a DRHP worth approximately Rs. 850 crore with SEBI. The offering comprises of a fresh issue of Rs.200 crore and a sale of equity shares worth about Rs.650 crore. Capillary Technologies International Pte Ltd is selling the shares. They also want to proceed with a pre-IPO placement of Rs.40 crore in shares, which will be subtracted from the amount of the fresh offering.
To establish loyalty programmes for consumers and channel partners, the company provides AI-based, cloud-native software-as-a-service products such as loyalty management and customer data platforms. The company provides a diverse product suite and technology platform to customers, allowing them to conduct end-to-end loyalty programmes and gain an omnichannel, unified picture of targeting their customers with customised offers.
Capillary Technologies India Ltd. Objective
- The company proposes to use the funds for strategic acquisitions and repayment/prepayment of certain portions of debt.
- They will use the IPO proceeds for product development, investments in technology and other growth initiatives.
Capillary Technologies IPO Financials
| Particulars | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue From Operation | 1,149.03 | 1,661.23 | 1,731.48 |
| EBITDA | 950.47 | 696.52 | 66.77 |
| EBITDA Margin (%) | 45.84 | 31.00 | 3.41 |
| Profit After Tax | 208.29 | 45.99 | 54.09 |
| EPS | 3.54 | 0.04 | 2.44 |
| ROE | NA | NA | NA |
Capillary Technologies Peer comparison in loyalty management space
| Company | Year ending | Gross Margin (%) | Revenue growth in the past 3 years (%) |
|---|---|---|---|
| Capillary | March 2021 | 61% | -3% |
| Zeta Global | Dec 2020 | 60% | 6% |
| Sprinklr | Jan 2021 | 69% | 12% |
| Veeva | Jan 2021 | 72% | 29% |
| Shopify | Dec 2020 | 53% | 40% |
| Twilio | Dec 2020 | 56% | 64% |
| Ring Central | Dec 2020 | 73% | 33% |
| Paylocity | Jan 2021 | 65% | 20% |
| Coupa Software | Jan 2021 | 59% | 43% |
| Wix | Dec 2020 | 68% | 32% |
Capillary Technologies IPO Key Points
Strengths
- They are a market leader in both loyalty management and consumer engagements in Asia, with a 39% market share in FY20
- After acquiring Persuade Group, the company now has 37 employees in the United States and also has a multiple Fortune 100 and Fortune 500 companies as their customers
- Their main focus is on adding more enterprise customers to their portfolio and this leads them to have a synergistic customer acquisition model
- They have been developing comprehensive solutions for loyalty management over the last decade
- They also provide analytics and AI-driven Solutions which have enabled them to have an extensive set of customers standing at 855.53 million
Risks
- Inability to be cost effective while trying to gain more customers will adversely affect the business of the company
- A large part of the revenue is generated from a specific group of customers. If there is any decrease in the amount of these customers, it will materially affect the operations of the company
- Decrease in demand in the industry verticals that the company supplies will lead to reduction in revenues and an adverse effect on the operations of the company
- If Capillary isn’t successful in getting more customers and fruitfully executing their strategy, then it will materially affect the business functions and operations
Capillary Technologies IPO FAQs :
Q1. What is Capillary Technologies India Ltd. IPO?
Ans. Capillary Technologies will raise Rs 850 crore through public route, costing Rs 200 crore in fresh shares and Rs 650 crore in offer for sale.
Q2. When will Capillary Technologies India Ltd. IPO allotment be available?
Ans. Details not available.
Q3. What will be Capillary Technologies India Ltd. IPO lot size?
Ans. Details not available.
Q4. When will Capillary Technologies India Ltd. IPO open for subscription?
Ans. Details not available.
Q5. What minimum lot size can retail investors subscribe to?
Ans. Retail investors can apply for a minimum of one lot.
Q6. When will Capillary Technologies India Ltd. list on exchanges?
Ans. It usually takes ten working days from the last day of subscription to list the IPO on the bourses.
Q7. I have finished the application process for Capillary Technologies India Ltd. IPO, but the funds are not yet debited. What is the reason?
Ans. The bank initially blocks the amount you bid for an IPO. It will debit the amount when the shares get allotted or unblock it after the UPI mandate expiry date.
Q8. Can I submit more than one application for the public issue of Capillary Technologies India Ltd. using one PAN?
Ans. You can submit only one application using one PAN card.
Q9. What is the minimum order quantity for Capillary Technologies India Ltd. IPO?
Ans. The minimum size of the application will be one lot.
