TLDR;
Alright, so this is a recap of the IPOs that are making news this week. They're looking at Value360, Recode Studios, Bagmane REIT, and Kissht. The discussion covers the business models, financials, and whether or not these IPOs are worth a dekko.
- Value360 is a marketing and PR firm, Recode Studios is all about beauty and personal care, Bagmane REIT is into real estate investment, and Kissht is a digital lender.
- There's a lot of talk about valuations, potential risks, and whether these companies are good for the short term or long term.
- They also discuss the importance of diversification and not just chasing after equity returns.
Opening Remarks [0:00]
The Sunday Investing crew is back after a bit of a break, diving into the primary market scene. They're kicking things off after a lull in IPO activity, thanks to the secondary markets being a bit shaky. They're making no promises about sticking around, it all depends on whether there are enough interesting IPOs and if the market's playing nice. They remind everyone that they're not SEBI registered, so take everything with a pinch of salt and do your own homework before making any decisions. They'll be covering Value360 and Recode Studios (the SME ones), followed by Bagmane REIT and Kissht (the mainboard ones).
Value360 Communications (SME) [2:46]
Value360 Communications, incorporated in 2009, is an integrated marketing and PR solutions provider in India. The IPO is ₹42 crore, with ₹38 crore being a fresh issue. The market cap is ₹158 crore. FY25 financials show a top line of ₹55 crore and a bottom line of ₹5.7 crore. They have two main verticals: Value 360 for investor relations and crisis communication, and Popcorn for digital advertisement and content management. They generate revenue through contract-based and retainer revenue models. Clients include Maruti, Kia, and Ab InBev. The company is raising ₹12.7 crore for working capital, ₹4.65 crore for capex, and ₹4.5 crore for debt repayment. They are also investing ₹7 crore in Clan Connect, an influencer marketing company, with plans to increase their stake and potentially acquire the company.
Revenues have remained flat from FY23 to FY25, around ₹50-55 crore, but EBITDA margins have doubled from 11% to 22%, and PAT margins have increased from 1% to 11%. The company has shifted from quantity-based revenue to quality-based revenue, reducing customers and increasing ticket sizes. Traveling expenses have decreased significantly, contributing to the improved PAT. The company is looking to expand into IPO-related and healthcare services. A red flag is the lack of a QIB anchor. It's a decent company, but it's a neutral rating for the short term, with potential for long-term exploration after results are out.
Recode Studios (SME) [15:19]
Recode Studios, formerly Lush Looks, is an Indian beauty and personal care company operating under the brand Recode. It's an omni-channel brand with both online and offline presence. The IPO is ₹45 crore, with ₹40 crore being a fresh issue. The market cap is ₹168 crore. FY25 financials show a top line of ₹48 crore and a bottom line of ₹3.3 crore. They offer a range of makeup products, sourcing manufacturers from various locations, including Taiwan and China, to compete with top international brands. They sell products at prices four to five times lower than international brands.
Around 45% of revenues come from their own website and online marketplaces, 30% from distributors and makeup artists, and 24-25% from their own stores. They target makeup academies, beauty schools, and salons for customer acquisition. From FY23 to FY25, revenues have grown from ₹22 crore to ₹48 crore, and in the first 9 months of FY26, they have already done ₹57 crore. EBITDA margins have increased from 6.5-7% in FY23 to around 23% in FY26. They are using ₹20 crore for working capital and ₹6 crore for setting up a warehouse in Ludhiana. They have hired CARE Ratings to voluntarily monitor IPO proceeds. The P/E ratio is around 14-15 times, and they are priced at two to three times price to sales. The valuation looks decent, and it's good to apply on a personal level.
Bagmane REIT (Mainboard) [26:13]
Bagmane Prime Office is a Bangalore-based office real estate investment trust focused on owning and managing premium Grade A+ business parks in Bangalore. The issue is ₹3,400 crore, with ₹2,400 crore being a fresh issue and ₹1,000 crore being an OFS. FY25 financial revenue is around ₹7,200 crores and ₹900 crores net distributable cash flow. It is a trust that pools people's money to buy commercial real estate, such as office parks and malls. The company rents out these buildings, and the rent comes back to the investors as income.
Bagmane focuses on the outer ring road and central business district micro markets in Bangalore. They have about six buildings or office parks in Bangalore. They have a 20 million square foot portfolio with a 98% occupancy rate. The net operating income is about ₹2,700 crore, which translates to about ₹2,000 crore per year of distributable cash flow. The yield is roughly 6% at the issue price. About 99% of their tenants are MNCs, 90% are GCCs, and 67% are Fortune 500 companies. The REIT is coming at a 9% discount to the asset value. There is an expectation of a 5% listing gain, with a potential intraday move of 6-7%.
Kissht (Mainboard) [46:23]
1 EMI Technology Solutions, known as Kissht, is a technology-enabled lender in India, primarily offering digital loans through its mobile application. The IPO is ₹926 crore, with ₹850 crore being a fresh issue. The market cap is ₹2,881 crore. They focus on the urban population and the mass market, with 63.4% of their customers coming from India's top 50 cities. The average loan ticket size is about ₹31,000. The company has two verticals through which it lends: a captive NBFC called Crava and off-book arrangements.
About 51% of the loans given are through Crava, and the rest 49% are through off-book arrangements. The company has a 97% collection efficiency in the 30 TPD. The NPA level has increased from 2.31% in FY23 to 2.9% due to an accounting change. The company has about 93% from the unsecured portfolio and about 7% from the secured portfolio. ₹637.5 crore is towards augmenting the capital base of Crava. The AUM has increased from ₹1,267 crore in FY23 to ₹5,956 crore in the first 9 months of FY26. The contingent liability is ₹1,793 crore. The price to book is coming at about 1.15 to 1.2 times post money. It is a blind apply for the medium term.
Closing Remarks [1:12:06]
They wrap up the session, noting the differing views on Kissht. The final strategy is to go for Bagmane, some retail, and Recode. They encourage viewers to share their thoughts on the session and express hope to see everyone again next week.
