Tuesday, September 13, 2011

IPO ANALYSIS : TAKSHEEL SOLUTIONS LIMITED - NON COMPLIANCE SOLUTION COMPANY. AVOID.

Echoing integrity, this is the company’s logo /slogan. The dictionary meaning of integrity is - the quality of being honest and having strong moral principles. Looking at how the company has been managed all these years indicates that the company neither is honest nor have any moral principles. Taksheel is in the business of providing solutions. However the Taksheel has miserably failed in finding solutions to comply with the statutory obligations.

The lists of non compliance are:

Non-compliance and/or late compliance with the regulations pertaining to certain mandatory requirements under the relevant regulations of FEMA in relation issue of shares to foreign entity by way of share swap.

Late Compliance and/or Non-compliance by the Promoters with the relevant regulations pertaining to certain mandatory requirements under the regulations of FEMA in respect of certain filings for investment in overseas subsidiary.

Non-compliance and/or late compliance with the regulations pertaining to certain mandatory requirements under the relevant regulations of FEMA for capitalization of export receivables.

Non-compliance and/or late compliance with the regulations pertaining to certain mandatory requirements under the relevant regulations of FEMA for investment by the erstwhile over seas borrowings.

Non-compliance with the regulations pertaining to obtaining prior approval of FIPB in relation to issue of shares to Lexicon Private Limited.

Non-compliance with the regulations pertaining to obtaining prior approval of RBI for disinvestment of the shareholding in IBSS Inc.

Non-compliance with the regulations pertaining to obtaining prior approval of FIBP in relation to transfer of shares by Mr. Pavan Kuchana (then an NRI) to Lexicon Private Limited.

Non-compliance with the regulations pertaining to obtaining prior approval of FIBP in relation to transfer of shares by IBSS Inc (then an NRI) to Lexicon Private Limited.

Statutory dues: As on date of DRHP following are the statutory dues which are due for more than six months and had not been paid by the company and it includes the outstanding statutory liabilities of foreign branch amounting to Rs. 5.18 lacs.

PARTICULARS

AMOUNT (LACS)

Fed income tax (US)

2.47

Fringe Benefit Tax

1.22

Futa Payable (US)

0.02

Income Tax

176.11

PF Payable

5.06

Professional Tax

0.68

Social Sec. & Medical Payable (US)

2.21

State Income Tax Payable (US)

0.10

Sui/dis Payable (US)

0.38

TDS

41.85

TOTAL

230.10





















BUSINESS PROFILE:

Taksheel is comprehensive IT Solution Company focused on providing products and services for the companies engaged in financial services industry & Telecom. This eleven year old company specializes in providing products and solutions in the following segments:

• Wealth Management Solutions

• Telecom Solutions

• Application Development & Maintenance

• Data Warehousing & Business Intelligence

• Offshore Outsourcing

FINANCIALS: RS IN CRORES, EXCEPT EPS.


31-03-09

31-03-10

31-03-11

TOTAL INCOME

35.43

49.50

147.26

PAT

2.40

8.09#

27.42#

EPS

2.12

5.84

16.50

NOTE- the Company has not made any provisions for taxes for 2010 and also for 2011, which is perplexing.

MATTERS OF CONCERN:

1. Taksheel is exposed to concentration risk in terms of geography and number of clients. Company caters to clients based only in United States of America and top 10 clients contributed about 85% of the sales during FY11.

2. As on March 31, 2011, Company had a resource base of 40 employees, which is relative low as company outsourced all on-site jobs to third parties.

3. The company had negative cash flow in the last 5 years.

4. Auditors have qualified on certain matters in the previous years.

5. IPO grade 2 by CARE.

CARE says that the grading is constrained by the revenue concentration risk in terms of geography, verticals and number of clients, high reliance on onsite service delivery model through subcontracting coupled with absence of adequate development setup in India, growing protectionist trend in US which might reduce prospects for outsourcing, significantly high level of debtors leading to negative cash flow from operations.

VALUATION AND RECOMMENDATIONS:

Taking into account the amount the company intends to rise and number of equity shares offered the price band would around Rs 140.

The revenue growth, EPS are irrelevant as the company has not paid taxes on profit in the last two years. The figures for FY11 appears to be manufactured in view of the IPO envisaged. Thoroughly unprofessionally managed and the only purpose of coming with the issue is to loot the public money. One does not understand why PNB Investment Services (wholly owned subsidiary of PNB) took the mandate to manage this kind of issue.

ANOTHER LOOT MAAR IPO – AVOID.


3 comments:

  1. What a good article! I have directed people flocking on moneycontrol to look at this issue and decide for themselves what Taksheel is upto.

    Many Thanks for saving at least some investors skin.

    ReplyDelete
  2. THANKS FOR SAVING MONEY OF MANY PEOPLES

    ReplyDelete