Corporate structure

 Only CIL and Apex Advance Technology LLC has material business
 Apex Engineer and Cadsys LLC report insignificant loss

IPO summary –
 CIL (IPO Company) incorporated a 100% owned subsidiary in USA in January 2016 - Apex
Advance Technologies LLC (USA). This subsidiary acquired a GIS business of another third party
company Apex CoVantage in March 2016.
 It was debt funded acquisition, where parent company in India (i.e. CIL) took the debt and
advanced it to its USA based subsidiary.
 Acquisition seems highly EPS accretive (too good to be true types)
o Debt taken to fund acquisition is Rs. 12.31 crs.
o Sales and PAT generated on investment is Rs. 26.5 crs. and Rs. 8.5 crs. respectively
 IPO proceeds will go entirely towards repayment of this long term debt availed for acquisition
 Post listing scenario
Pre issue share 54,02,500
Issued shares 21,00,000
Post issue share 75,02,500
Issue price 70
Mcap (INR Crs.) 53

Promoter 35,57,100 47.4%

Promoter + Daughter 17,27,400 23.0%
Total promoter shareholding 70.4%

Valuation -
 Mcap is 55 crs. –
o On 11 crs. PAT, Mcap is 5x P/E
o On 8 crs. of free cash flow, it is 14.5% yield
 Company is long term debt free, with Rs.22 crs. cash on balance sheet
 Not sure why did company dilute equity via IPO when it could have paid off its debt from internal
accruals

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Financials –
Consolidated 2013 2014 2015 2016 2017
Sales 14.3 21.1 24.4 32.0 43.0
EBITDA 4.0 5.9 8.8 10.1 16.8
EBITDA margin 28.2% 28.1% 36.1% 31.5% 39.1%
Depreciation 1.5 1.5 0.9 1.1 3.1
Interest 0.2 0.3 0.6 0.9 1.6
PBT 2.4 4.1 7.3 8.1 12.2
Tax 0.2 1.1 2.6 2.6 1.2
Tax rate might have decreased due to
Tax rate 7.8% 27.0% 35.6% 31.9% 9.9%
higher net income from USA subsidiary
PAT 2.2 3.0 4.7 5.5 11.0
PAT growth 36% 58% 17% 99%

Networth 7.0 8.7 12.8 18.1 29.0

Debt 2.9 1.5 3.4 3.7 17.2 Acquisition of GIS business by USA
Payables 0.2 0.6 0.2 0.5 5.5 based subsidiary led to increase in
Fixed Assets 3.3 4.1 4.1 4.8 15.6 Fixed assets and debt

Receivables 1.8 0.3 2.3 3.5 9.3

Cash 4.7 9.5 14.0 16.0 22.0

RoE 31% 34% 37% 31% 38%

D/E 0.4 0.2 0.3 0.2 0.6

CFO 4.2 8.4 4.2 5.1 6.5

CFI -2.0 -2.0 0.2 -0.8 -13.3
CFF 2.5 -1.7 -0.0 -1.9 11.9

Business profile
 CIL is a domain-focused GIS and engineering business technology service provider based out of
Hyderabad, Telangana, India, with presence in the United States.
 CIL is primarily engaged in providing IT enabled services for geospatial, field engineering survey,
software development and engineering design services in the domains like, telecom, CATV, oil &
gas, electricity and other utilities.

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