Kuberan Global Edu Solutions Limited IPO Review

19 Apr 2021  Read 1022 Views

After a mini pause, IPO season is back on track! It's time for Kuberan Global Edu Solutions Limited to hit the markets with its IPO. And as we always do, we'll help you evaluate this offering.

The IPO will be open for subscription from April 20 2021. So let's quickly dissect and process some important details that will reduce your brain's task. Shall we? 

Kuberan Global Edu Solutions IPO – Details

The IPO, which will start on April 20, will be open for a week till April 27. This will be a fixed price issue having a face value of Rs 10. However, the price of the IPO will be fixed at Rs 20 per equity share. The shares are all set to be listed on the BSE SME on May 5 of 2021. Allotment and refunds are expected to be fulfilled well before the same. 

The promoter holding, which is currently at 93.36%, will come down to 68.63% post the issue. An individual or retail investor can make a subscription for a minimum of 6000 equity shares, and this would amount to roughly Rs 1,20,000. The maximum quantity one could subscribe for is also fixed as 1 lot containing 6000 equity shares. 

Pricing details of KGES IPO 

Particulars 

Total lots 

Equity shares in each lot

Total Amount (in Rs) 

Minimum 

1

6000

1,20,000

Maximum 

1

6000

1,20,000

The entire issue will be worth 1.12 crores and will be containing about 558,000 equity shares. The proceeds from the IPO will be utilised for the purpose of digitalising banking courses through the online mode by using the application of IT (information technology). The capital raised will also be used for meeting other general and corporate needs of the company. FedEx Securities limited will be the lead manager of the IPO.

Kuberan global Edu Solutions IPO details 

IPO Opening date 

April 20, 2021 

IPO Closing date

April 27, 2021

Face value 

Rs 10 per equity share 

Issue size 

558,000 equity shares amounting to 1.12 crores

Issue type 

Fixed price issue type 

Listing at 

BSE SME 

Price of the issue 

Rs 20 each equity share

About the company

The company is based in Tamil Nadu and came into existence in 2013. They offer 'test prep' services to a wide variety of students who are preparing for CA, CS and CMA. They also offer service for courses like MBA, SSC (Staff Selection Commission) and a list of other competitive exams. For anyone looking for a virtual learning environment, Kuberan Global Edu Solutions Limited (KGES) offers the right product you are searching for.

They utilise Information Technology in order to offer their services as per the desire of their students. Their platform also has online web conferencing, chat rooms for query clarification and voice over IP (Internet Protocol). Mr Chandramouleeswaran Krishnan is the promoter of KGES. The company is currently holding training units in Coimbatore, Tuticorin, Surat and Udumalpet.

Financials

The table below gives a brief view of the financials of the company for the last three years. As you can see, the profit has been on a decreasing trend. However, it is important to note that the profit after tax of the company till October was 8.70 lakhs. Anyway, the entire profit for the various financial year's are projected to be less than 1 crore. 

Financials of KGES (in lakhs) 

Particulars

Mar 2020

Mar 19

Mar 18

Total assets 

156.19

163.93

123.32

Total revenue 

90.85

98.75

82.80

PAT (profit after tax) 

1.65

2.92

17.60

Peer to Peer comparison 

There are a lot of listed peers. Yet, a handful of companies are presented in order to help you have a view as to how the market would look like.

Company

Market capital (in crore)

P/B

P/E

EPS

EBITDA

Career point

232.51

0.55

15.98

8.00

11.49

CL educate

124.66

0.41

0

-39.62

-85.01

Zee learn

336.20

0.68

11.45

0.90

7.17

KGES  (for last 3 years and are approximated values)

4.21 crore 

1.83

-

0.94

-

Source: Ticker

Advantages of the issue

Following are some of the positive features of the issue which an investor should take into consideration:

  • The entire company runs on the shoulders of experienced staff and management. They have good professional knowledge and an entrepreneurial mindset. 
  • It has a strong portfolio of products that are offered to its students. Courses are offered both via online and offline through its training units. 
  • Listing gains have always been a major factor for which IPO's are mostly sought after. And the same will apply to the KGES IPO as well.

Disadvantages of the issue

No doubt the company has its own set of pit holes which a retail investor should watch out for. They are as follows:

  • A lot of experts claim that the IPO might be overpriced, which is a place of concern. 
  • Inconsistency among its bottom line and top line might come as serious trouble. 
  • Heavy competition is an important factor which an individual should look at.
  • There is a lot of operating cost inherited in this sort of business, so a failure to retain students as a result of competition might cause trouble to its profits.

Conclusion

Hope you found what you were searching for. Note that, as an investor, you should weigh both the pros and cons. You should arrive at a decision taking into account your area of comfort and risk profile. While this prevailing IPO frenzy may entice you to jump in, you still carry the risk of drowning. As we always say, do your research before taking any investment decisions.

So, what's your take on this IPO? Tell us in the comments below.

About the Author: Varishika Dinesh | 103 Post(s)

Varishika is on the verge of successfully completing B.Com. Nothing excites her more than reading books and watching movies. Business, finance, economy? You have her attention.

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