Dhanus Technologies Limited- IPO Prospects
Issue Period : 10th September -12th September
Face Value - Rs 10
Price -Rs 280 -Rs 295
Min .Order -20
sharesGrade - Average
Recommendation - Skip
Company Info
Dhanus Technologies is a rapidly growing communications services company that offers telecommunication services and unified messaging and enhanced logistics services. DTL has a BPO operation of telemarketing services to the US, UK and Australia markets. It has two wholly owned subsidiaries namely Dhanus Global Medicare Limited (Chennai) and Dhanus Technologies, Inc. (USA).
The company operates in the following business segments
Telecards
Teleservices/ITES/BPO Services
Telematics (FleeTrac services)
Comments
Investors can stay away from from the initial public offer of Dhanus Technologies, given the high competition in its business segments and relatively high execution risks. At the upper end of the price band (Rs 295), the offer values the company at about 17 times its trailing 12 month earnings, without factoring in the equity dilution due to the offer. This appears stiff in comparison to stocks of smaller telecom and software services as well as large hardware companies.
DTL has a falling profit margin for all its businesses (telecom, software and BPO). As per the management, investment in different areas of business is one of the reasons for the falling margins.
This issue is aggressively priced as compared to industry peers like Bharti Airtel, MTNL, Reliance Communications, Tulip IT Services and VSNL. We recommend an Ignore to our investors
Premium on Listing - 5-10%
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