The net proceeds from the IPO will be utilized towards funding working capital requirements (Rs 54 crs), setting up a digital video content production studio (DVCP Studio) (Rs 11 crs), setting up a new customer experience centres and computer aided telephonic interview centres (Rs 22 crs), funding investment in IT infrastructure development of the company and its subsidiaries (Rs 33 crs), and general corporate purposes (Rs 304 crs).RK Swamy is a mainboard IPO with a book-built issue of ₹424 crores. The issue is a combination of fresh issue of 0.6 crore shares (Rs 173 crs) and offer-for-sale of 0.87 crore shares (Rs 251 crs). The IPO will open from 4th March, 2024 to 6th March, 2024. The allotment is expected to be done on 7th March, 2024 and it will list on BSE, NSE with tentative listing date on 12th March, 2024. The price band is ₹270 to ₹288 per share, with a minimum lot size of 50 shares and minimum investment amount of ₹14,400. The book running lead managers is SBI Capital Markets, IIFL Securities and Motilal Oswal Investment Advisors. Kfin Technologies Ltd is the registrar for the issue.

Founded in 1973, RK Swamy is a data driven integrated marketing services provider, offering creative, media, data analytics and market research services. RK Swamy has a track record of over 5 decades and have been serving leading companies like Aditya Birla Sun Life AMC, Cera Sanitaryware, Dr Reddy’s Laboratories, Havells, Hawkins Cookers, Himalaya Wellness, HPCL, Royal Enfield and many others. They offer comprehensive range of services in 3 business segments: (i) Integrated Marketing Communications, (ii) Customer Data Analytics and Marketing Technology; and (iii) Full Service Market Research and Syndicated Studies. In H1FY24, the company released 438 creative campaigns on behalf of their clients across various media outlets. The company has 2,553 employees spread across 12 offices and 12 field locations across India.

• The company is one of the leading integrated marketing service groups in India that has served its clients for 50 years. 
• The board of directors and senior management comprise of professionals with extensive experience in the advertising and marketing services industry. 
• Well-diversified customer base with long-standing relationship. As of H1FY24, the company derived 94% of revenue from its repeat customers. 
• 93% revenue comes from the private sector and rest from public sector.

The following points should be kept in mind:

• The company’s business is concentrated around key clients, and the average number of years of relationships with top-10 clients is ~19 years. Any failure to retain these clients or reduction in their marketing budgets will adversely affect the company’s business and operations. 
• As on H1FY24, revenues are highly dependent on key industries- BFSI (25%), automotive (18%) and FMCG/retail/consumer durables/ecommerce (17%). Any slowdown in these industries or decrease in the demand for marketing services could affect the financial performance.
• Inability to adequately adapt to competitive pricing models to retain existing clients and attract prospective clients may have an adverse impact on the business.
• As on H1FY24, a significant portion of total revenue is derived from subsidiaries- Hansa Consumer Equity (31%) and Hansa Research Group (25%). In the event of any downturn in these subsidiaries could compromise the company’s ability to invest in new ventures, service debts or maintain operational efficiencies.