The Phoenix Mills Ltd. (PDF)
Trending Sector
Top Losers
Current IPOs
Closed IPOs
Listed IPOs
IPO Performers
CAGR Calculator
SIP Calculator
Retirement Planning Calculator
Adani Ports and SEZ
R K Swamy Ltd IPO
Status:
Overview
IPO date
04 Mar 2024 to 06 Mar 2024
Face value
₹ 5 per share
Price
₹ 270 to ₹288 per share
Issue Size
14,706,944 shares
(aggregating up to ₹ 423.56 Cr)
(aggregating up to ₹ 423.56 Cr)
Allotment Date
07 Mar 2024
Listing at
NSE
Issue type
Book Building
Sector
Objectives of R K Swamy Ltd IPO
Initial public offering of 14,733,883 equity shares* of face value of Re. 5 each ("Equity Shares") of R K Swamy Limited ("Company" or the "Issuer") for cash at a price of Rs. 288.00^* per equity share (including a share premium of Rs. 283.00 per equity share) (the "Offer Price") aggregating Rs. 423.56 crores* (the "Offer"), comprising a fresh issue of 6,033,883 equity shares* aggregating Rs. 173.00 crores* ("Fresh Issue") and an offer for sale of 8,700,000 equity shares* (the "Offered Shares") aggregating Rs. 250.56 crores* (the "Offer for Sale" and together with the fresh issue, the "Offer"), comprising 1,788,093 equity shares* by Srinivasan K Swamy aggregating Rs 51.50 crores*, 1,788,093 equity shares* by Narasimhan Krishnaswamy aggregating Rs. 51.50 crores*, 4,445,714 equity shares* by Evanston Pioneer Fund l.p. aggregating Rs. 128.04 crores* and 678,100 equity shares* by Prem Marketing Ventures llp aggregating Rs. 19.53 crores* (collectively, the ôselling shareholdersö).
The offer included a reservation of 287,356 equity shares*, aggregating
Rs. 7.5 crores^^* (constituting 0.57 % of the post offer paid-up equity share capital of the company, for subscription by eligible employees (the "Employee Reservation Portion"). The offer less the employee reservation portion is hereinafter referred to as the "Net Offer". The offer and the net offer constituted 29.18% and 28.61%, respectively, of the post-offer paid-up equity share capital of the company. The company in consultation with the book running lead managers ("brlms"), offered a discount of 9.38% (equivalent of Rs. 27 per equity share) on the offer price to eligible employees bidding in the employee reservation portion ("Employee Discount").
*Subject to finalization of basis of allotment.
^A Discount of Rs. 27 per equity share was offered to eligible employees bidding in the employee reservation portion
^^After employee discount
R K Swamy Ltd IPO Strategy
- Deepen existing client relationships, expand our client base, while focusing on key sectors.
- Focus on creation of digital content at scale.
- Expanding our presence in domestic and international markets.
- Focus on new initiatives aimed at enhancing our product and service portfolio.
- Continue to focus and invest in talent retention, enhancement and expansion.
About R K Swamy Ltd
R K Swamy Limited was originally incorporated on February 16, 1973, as R. K. Swamy Advertising Associates Private Limited', a private limited company, pursuant to a certificate of incorporation issued by the Registrar of Companies, Tamil Nadu at Madras. The name of the Company was changed from R. K. Swamy Advertising Associates Private Limited' to R. K. Swamy BBDO Advertising Private Limited' dated September 11, 1990. Thereafter, the Board of the Company approved the change in the name of Company from R. K. Swamy BBDO Advertising Private Limited' to R. K. Swamy BBDO Private Limited vide fresh certificate of incorporation on February 21, 2005. Afterwards, the name of Company changed from R. K. Swamy BBDO Private Limited' to R K Swamy Private Limited' issued by the RoC, on June 21, 2022. Accordingly, the Company was converted into a public limited company and the name of Company changed from R K Swamy Private Limited' to R K Swamy Limited' through a fresh certificate of incorporation dated July 17, 2023 issued by the RoC.
The Company is a data driven majority owned integrated marketing services provider in India, offering digital initiative solution for creative, media, data analytics and market research services. The Company is among the top 10 diversified integrated marketing communications services groups operating in India with a comprehensive range of services into the following interrelated and complementary business segments comprising of (i) Integrated Marketing Communications, (ii) Customer Data Analytics and MarTech; and (iii) Full-Service Market Research.
During Fiscal 2023, the Company released over 818 creative campaigns on behalf of the clients across various media outlets, handled over 97.69 terabytes of data and have conducted over 2.37 million consumer interviews across quantitative, qualitative and telephonic surveys.
During FY 2022-23, the Holding Company acquired the entire equity shareholding of Hansa Research Group Private Limited (HRG) held by Hansa Vision India Private Limited (HVIPL / Erstwhile Parent Company) through Share Transfer Agreement dated 29 July 2022, and hence HRG became the wholly owned subsidiary of Holding Company w.e.f. 29 July 2022. Similarly, the Holding Company acquired the entire equity shareholding of Hansa Customer Equity Private Limited (HCE) held by Hansa Vision India Private Limited (HVIPL) through the Share Transfer Agreement dated 11 August 2022, hence HCE became the wholly owned subsidiary of the Holding Company w.e.f. 11 August 2022.
In 2022-23, the Marketing Communication and Allied Businesses Division (MARCOM/ Demerged Undertaking) of Hansa Vision India Private Limited (HVIPL/ Transferor Company), the erstwhile parent company was demerged into the Holding Company (R K Swamy Private Limited / Transferee Company) through the Scheme of Arrangement for Demerger effective from 8 February 2023.
The Company is planning a fresh issue of equity shares by raising capital aggregating to Rs 215 Crores and an Offer for Sale aggregating upto Rs 8,700,000 through Initial Public Offering.
Unlock Stock of the Month
T&C*
Strengths vs Risks of R K Swamy Ltd
Know the pros & cons
Strengths
Integrated marketing services provider serving clients for 50 years.- 15 year track record in the Data Analytics and Marketing Technology segment, with a proven ability of producing digital content at scale, a leader in the business of market research.
- Well established brands across segments with experienced Promoters and a professional Senior
Management.
- Well diversified customer base with long standing relationships.
- Established internal infrastructure for efficient delivery of services.
Risks
- Its business is concentrated around key clients, which account for a significant amount of its
revenue. If the company fail to retain these clients, or diversify its client base or if its key clients reduce their marketing budgets, the company's business, revenue growth, results of operations, cash flows and financial condition may be materially and adversely affected.
- Its revenues are highly dependent on certain key industries. Any decrease in demand for marketing
services in these industry verticals could reduce its revenues and adversely affect its business,
financial condition and results of operations.
- Digital marketing and Integrated Marketing Communications form a substantial part of its offerings and hence are the company's major source of income. Any changes in trend, decrease in digital advertisement/ Integrated Marketing Communications-spend by its clients or inability or delays in aligning its offerings with market trends and technological advancements, could have a material adverse effect on its business, revenue growth and results of operations and financial condition.
- If the company is unable to consistently upgrade its data analytics capabilities in line with the latest technologies or if its data-based predictions are wrong because the company's technology hasn't evolved enough or due to any other reasons, it may adversely affect its quality of services and clients' satisfaction. The cost of implementing any new technologies could adversely affect its business and financial condition.
- Clients may delay or default on their payments. This could adversely affect its business and financial condition.
- High working capital requirements of the Company and high value of trade receivables and payables
vis-a-vis revenues of the Company due to the nature of its industry and business model for last three Fiscal years may persist going forward and could adversely affect its business and results of
operations.
- Companies may undertake their advertising projects, market research and data analysis functions inhouse and setting up dedicated departments to service their marketing needs, thus reducing its prospective customer base. This may adversely affect its revenues and growth prospects.
- Certain services the company offer are dependent on the availability of space or sites for publishing of ads, other media purchases and production costs. Any non availability or significant increase in the prices of such ad space or sites or other such purchases may adversely affect its business, results of operations and financial condition.
- Its inability to adequately adapt to competitive pricing models to retain existing clients and attract prospective clients may have an adverse impact on its business, financial condition and results of operations.
- Its results of operations and the company's key business measures are subject to quarterly variations that could cause fluctuations in its results of operations.
- Its efforts to diversify the company product portfolio through new initiatives may adversely affect its business operations, expenses and customer satisfaction.
- While its asset light model contributes to operating leverage and low capital requirements, it may also increase its dependency on various third parties for certain outsourced services, including designers, production houses, advertising platforms and other intermediaries required for advertising, data analytics and ground-based research. If the company does not manage to utilise these in a cost-effective manner, it may adversely affect its business and operating expenses.
- The company and its vendors are associated with industry associations like the Indian Newspaper Society ("INS"), Indian Broadcasting Digital Foundation ("IBDF"), and Advertising Agencies Association of India ("AAAI"). Any non-compliance with the rules laid down by these associations may adversely affect its business, reputation and revenue from operations.
- The company is dependent on information technology systems and any cybersecurity breaches could adversely impact its reputation, operations expenses and profits.
- Its Promoters, key managerial personnel and senior management play a key role in its functioning
and the company heavily relies on their knowledge and experience for its business performance and growth aspects. Its inability to retain, or hire, train and motivate equally capable personnel may adversely affect its business, results of operations.
- The Company's financial performance and growth are significantly dependent on the sustained
profitability and operational success of its Subsidiaries and in the event of any downturn in one or more of its key Subsidiaries, its ability to invest in new ventures, service debts, or maintain operational efficiencies may be compromised, which could lead to adverse effects on its business, financial condition, and results of operations.
- The company or its business partners might have to comply with certain obligations or industry standards regarding security, data protection, and privacy, and any failure to comply with these requirements might have an adverse effect on its reputation, business, financial condition and operating results.
- The advertising, data analytics and market research industries require considerable human resources, which may adversely affect its business and operational expenses. Further, the company inability to hire, retain, train, and motivate qualified personnel could adversely affect its business, results of operations, and financial condition.
- The company has not been able to invest into its proposed objects during the last three Fiscals, as this proposed use of proceeds represent a strategic redirection from its financial allocation patterns observed over the past three fiscal years. Therefore, there exists a risk that its current strategic focus, as funded by this Offer, may not align with the rapidly evolving market trends and customer preferences, or that the company may fail to successfully implement these new initiatives, which could lead to reduced competitiveness and market share.
- If the company is unable to maintain and enhance its brand name and reputation, due to any negative backlash from advertising and social media campaigns that the company is routinely engaged in or any other similar factors, it may have a material adverse effect on its revenue and cost of operations.
- While the company has paid dividends during the six months ended September 30, 2023, the financial years ended March 31, 2023, March 31, 2022, and March 31, 2021, respectively, its ability to pay dividends in the future will dependa on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
- The company collect data from third parties like publishers, web browsing platforms or other software developers, and hence would be affected by availability of customer consent which could potentially result in a decrease in client satisfaction, a decline in its competitive positioning, and may result in a reduction in its revenue and profitability.
- Certain of its Group Companies and the company Promoter, Narasimhan Krishnaswamy are engaged, or are authorized by their constitutional documents to engage, in business activities which are similar to those undertaken by the Company and Subsidiaries, which may result in conflicts of interest.
- Its Promoters and Promoter Group will be able to exercise significant influence and control over it
after the Offer and may have interests that are different from or conflict with those of its other
shareholders.
- Its business is currently concentrated in India and the company has begun entering into foreign markets, including the middle east and neighbouring nations. Expansion into new geographies will cause it to incur significant costs, forex exposure and face regulatory, personnel and cultural challenges which may adversely affect its operational expenses.
- The Company, Directors, Promoters, Subsidiaries are or may be involved in certain legal and
regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company depends on its relationships with various newspapers, media channels, advertising platforms and creative talent to for its advertising and marketing offerings. Any strain in such relationships, may adversely affect its business, operational expenses and results of operations.
- If the company does not consistently diversify its products and services, its may not remain competitive in the advertising and marketing industry. However, its efforts to diversify the company product portfolio through new initiatives may adversely affect its business operations, expenses and customer satisfaction.
- The company is unable to trace some of its historical corporate records of the company filings with the RoC and there has been an inadvertent error in one of its form filings with the RoC. The company has received certain observations in the secretarial audit on the same.
- The company operates in a rapidly evolving media landscape including digital, print, TV, etc. If the company is unable to adapt and manage this landscape, it may adversely affect its business and revenue from operations.
- Though its integrated business model provides the opportunity for clients to engage its service across verticals, its may not be able to effectively cross-leverage its diverse offerings to clients due to a variety of reasons outside of the company control. This may adversely affect its growth prospects.
- The company operates a network of computer aided telephonic interviews ("CATI") and customer experience centres that require us to comply with data privacy regulations other data protection measure which could impose significant compliance burden and may adversely affect its business and profit margins.
- Because the company operates in a competitive industry, its revenues, profits or market share could be affected if the company is unable to compete effectively.
- Its business depends on the company's ability to deliver and maintain the quality of content for its clients and publishers. If the company is unable to consistently deliver, maintain its standards and achieve the resulted oriented objectives, it may adversely affect its reputation and customer satisfaction.
- Despite the expected market growth in the advertising, data analytics, and market research industries in India, the company cannot guarantee that the company will be able to capitalise on these, which may adversely affect its business and growth prospects.
- The company relies on its field infrastructure for collection, tabulation, classification and data inferences. The information provided by its field force is critical, and hence, the company may need to invest regularly in their training and professional development, which may adversely affect its operational expense and profit margins.
- There was a reduction in cash generated from operations for six months ended September 30,
2023 and in Fiscal 2023 as compared with Fiscal 2022. Similar fluctuations in operating cash flows
could affect its results of operations in the future.
- Often clients' feedback requires it to make multiple iterations of client project or may increase scope of projects without explicit commercial understanding, requiring additional manhours and increased production costs, which may adversely affect its operational expenses, profit margins and customer satisfaction.
- Lack of a clear marketing strategy could have an adverse effect on its financial conditions and results of operations.
- Due to low entry barriers in the marketing and advertising industry, the company is constantly competing with new entrants providing niche services. If the company is unable to manage this competition, its may be unable to retain the company market share, reputation and revenues.
- Industry information included in this Red Herring Prospectus has been derived from an industry
report prepared by CRISIL MI&A exclusively commissioned and paid for by it for such purpose and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- Failure to obtain or renew approvals, licenses, registration and permits to operate its business in a timely manner may adversely affect the company operations.
- If the company is unable to protect its intellectual property, or if the company face allegations of infringing others' intellectual property, its business, the company reputation, results of operations, cash flows and financial condition could be adversely affected.
- The company is unable to trace copies of the final approval received by the Company from the RBI, in respect of the transfer of certain equity shares to BBDO Asia Pacific Limited.
- Its Promoters, who also serve as directors, hold Equity Shares in the Company and are therefore
interested in the company performance in addition to their remuneration and reimbursement of expenses.
- The company does not own its branch offices, including its Registered Office and Corporate Office. Any termination or failure by it to renew the lease and license agreements in a favourable and timely manner, or at all, could adversely affect its business and results of operations.
- Its funding requirements and proposed deployment of the Net Proceeds are not appraised by any
independent agency and are based on management estimates and may require change based on
various factors, some of which are beyond its control, subject to certain compliance requirements, including prior shareholders' approval.
- The Offer Price, market capitalization to revenue from operations multiple and price to earnings ratio based on the Offer Price of our Company, may not be indicative of the market price of the Equity Shares on listing.
- The company ha in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.
- The company has certain contingent liabilities which, if materialized, may adversely affect its financial condition.
- Any future issuance of Equity Shares, or convertible securities or other equity linked instruments by it may dilute investors' shareholding and sale of Equity Shares by the Promoters may adversely affect the trading price of the Equity Shares.
- Under Indian law, foreign investors are subject to investment restrictions that limit its ability to
attract foreign investors, which may adversely affect the trading price of the Equity Shares.
- QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after the submission of their Bid, and Retail Individual Investors are not permitted to withdraw their Bids after closure of the Bid/ Offer Closing Date.
- Investors may be restricted in their ability to exercise pre-emptive rights under Indian law and thereby may suffer future dilution of their ownership position.
- The requirements of being a publicly listed company may strain its resources.
- The company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.
- Introduction of stricter norms regulating marketing practices by pharmaceutical companies could adversely affect its ability to effectively market in the pharmaceutical sector and to medical
professionals, thus may adversely affect its results of operations and customer base.
- Its insurance policies may not be adequate to cover all losses incurred in its business. An inability to maintain adequate insurance cover to protect it from material adverse incidents in connection with its business may adversely affect its operations and profitability.
- If there is any change in laws or regulations, including taxation laws, or their interpretation, such changes may significantly affect its financial statements.
- The company may be subject to pre-emptive surveillance measures like Additional Surveillance Measure ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges which may adversely
affect trading price of itd Equity Shares.
R K Swamy Ltd Peer Comparison
Understand the company’s industry standing
R K Swamy Ltd
Affle India Ltd
Latent View Analytics Ltd
Face Value
5
2
1
Standalone / Consolidated
Consolidated
Consolidated
Consolidated
Total Income Rs. Cr.
299.913
1488.28
594.528
EPS-Basis
7.03
18.43
7.71
EPS-Diluted
7.03
18.43
7.63
NAV Per Share
31.67
109.98
58.93
P/E-Basic EPS
40.96
66.74
63.7
P/E-Diluted EPS
---
---
---
RONW(%)
22.2
16.73
12.87
Latest NAV Period
---
---
---
Latest NAV
---
---
---
How to check the allotment status of R K Swamy Ltd IPO?
Follow the steps
Open link to the registrar using this URL (https://evault.kfintech.com/ipostatus/).
Select company from dropdown menu.
Enter details- PAN, Application number or DP client ID
Get your allotment status
Open link to the registrar using this URL (https://evault.kfintech.com/ipostatus/).
IPO reads
Stay updated with the latest IPO developments
December 9, 2024 | 5 min read
11 IPOs This Week: ₹18,482 Crores in Focus – GMP, SWOT, and All You Need to Know!
December 2, 2024 | 5 min read
Upcoming IPOs in December 2024: A Packed Month for Investors
November 25, 2024 | 5 min read
SME IPO Rush: 6 Issues Worth ₹410 Cr. Know Key Details Here!
October 25, 2024 | 5 min read
Waaree Energies IPO: GMP Soars 106% Amid 76.34x Subscription – Check Your Allotment Status!
October 22, 2024 | 5 min read
Upcoming IPOs: 9 Public Issues Set to Raise ₹10,984.8 Cr – Key Insights Inside!
October 17, 2024 | 5 min read
Hyundai IPO Hits a Speed Bump With 42% Subscription On Day 2 : 4 Reasons Why
September 6, 2024 | 5 min read
Bajaj Housing Finance IPO: All You Need to KnowOctober 17, 2024 | 5 min read
Hyundai IPO Hits a Speed Bump With 42% Subscription On Day 2 : 4 Reasons Why
August 26, 2024 | 5 min read
Premier Energies IPO: Key Details Ahead of the ₹2,830.40 Cr Issue LaunchMore on IPOs
Navigate your way to other IPO resources
Latest videos on IPOs
IPO highlights & details!
FAQs on IPO
Get answers to all your questions here!
The IPO opens on 04 Mar 2024 & closes on 06 Mar 2024.
R K Swamy Limited was originally incorporated on February 16, 1973, as R. K. Swamy Advertising Associates Private Limited', a private limited company, pursuant to a certificate of incorporation issued by the Registrar of Companies, Tamil Nadu at Madras. The name of the Company was changed from R. K. Swamy Advertising Associates Private Limited' to R. K. Swamy BBDO Advertising Private Limited' dated September 11, 1990. Thereafter, the Board of the Company approved the change in the name of Company from R. K. Swamy BBDO Advertising Private Limited' to R. K. Swamy BBDO Private Limited vide fresh certificate of incorporation on February 21, 2005. Afterwards, the name of Company changed from R. K. Swamy BBDO Private Limited' to R K Swamy Private Limited' issued by the RoC, on June 21, 2022. Accordingly, the Company was converted into a public limited company and the name of Company changed from R K Swamy Private Limited' to R K Swamy Limited' through a fresh certificate of incorporation dated July 17, 2023 issued by the RoC.
The Company is a data driven majority owned integrated marketing services provider in India, offering digital initiative solution for creative, media, data analytics and market research services. The Company is among the top 10 diversified integrated marketing communications services groups operating in India with a comprehensive range of services into the following interrelated and complementary business segments comprising of (i) Integrated Marketing Communications, (ii) Customer Data Analytics and MarTech; and (iii) Full-Service Market Research.
During Fiscal 2023, the Company released over 818 creative campaigns on behalf of the clients across various media outlets, handled over 97.69 terabytes of data and have conducted over 2.37 million consumer interviews across quantitative, qualitative and telephonic surveys.
During FY 2022-23, the Holding Company acquired the entire equity shareholding of Hansa Research Group Private Limited (HRG) held by Hansa Vision India Private Limited (HVIPL / Erstwhile Parent Company) through Share Transfer Agreement dated 29 July 2022, and hence HRG became the wholly owned subsidiary of Holding Company w.e.f. 29 July 2022. Similarly, the Holding Company acquired the entire equity shareholding of Hansa Customer Equity Private Limited (HCE) held by Hansa Vision India Private Limited (HVIPL) through the Share Transfer Agreement dated 11 August 2022, hence HCE became the wholly owned subsidiary of the Holding Company w.e.f. 11 August 2022.
In 2022-23, the Marketing Communication and Allied Businesses Division (MARCOM/ Demerged Undertaking) of Hansa Vision India Private Limited (HVIPL/ Transferor Company), the erstwhile parent company was demerged into the Holding Company (R K Swamy Private Limited / Transferee Company) through the Scheme of Arrangement for Demerger effective from 8 February 2023.
The Company is planning a fresh issue of equity shares by raising capital aggregating to Rs 215 Crores and an Offer for Sale aggregating upto Rs 8,700,000 through Initial Public Offering.
R K Swamy Ltd IPO will close on 06 Mar 2024.
- Integrated marketing services provider serving clients for 50 years.
- 15 year track record in the Data Analytics and Marketing Technology segment, with a proven ability of producing digital content at scale, a leader in the business of market research.
- Well established brands across segments with experienced Promoters and a professional Senior Management.
- Well diversified customer base with long standing relationships.
- Established internal infrastructure for efficient delivery of services.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | Srinivasan K Swamy (Sundar Swa | 17247080 | 38.8 | 15458987 | 30.62 |
| 2 | Narasimha Krishnaswamy (Shekar | 17748380 | 39.93 | 15960287 | 31.61 |
- Its business is concentrated around key clients, which account for a significant amount of its revenue. If the company fail to retain these clients, or diversify its client base or if its key clients reduce their marketing budgets, the company's business, revenue growth, results of operations, cash flows and financial condition may be materially and adversely affected.
- Its revenues are highly dependent on certain key industries. Any decrease in demand for marketing services in these industry verticals could reduce its revenues and adversely affect its business, financial condition and results of operations.
- Digital marketing and Integrated Marketing Communications form a substantial part of its offerings and hence are the company's major source of income. Any changes in trend, decrease in digital advertisement/ Integrated Marketing Communications-spend by its clients or inability or delays in aligning its offerings with market trends and technological advancements, could have a material adverse effect on its business, revenue growth and results of operations and financial condition.
- If the company is unable to consistently upgrade its data analytics capabilities in line with the latest technologies or if its data-based predictions are wrong because the company's technology hasn't evolved enough or due to any other reasons, it may adversely affect its quality of services and clients' satisfaction. The cost of implementing any new technologies could adversely affect its business and financial condition.
- Clients may delay or default on their payments. This could adversely affect its business and financial condition.
- High working capital requirements of the Company and high value of trade receivables and payables vis-a-vis revenues of the Company due to the nature of its industry and business model for last three Fiscal years may persist going forward and could adversely affect its business and results of operations.
- Companies may undertake their advertising projects, market research and data analysis functions inhouse and setting up dedicated departments to service their marketing needs, thus reducing its prospective customer base. This may adversely affect its revenues and growth prospects.
- Certain services the company offer are dependent on the availability of space or sites for publishing of ads, other media purchases and production costs. Any non availability or significant increase in the prices of such ad space or sites or other such purchases may adversely affect its business, results of operations and financial condition.
- Its inability to adequately adapt to competitive pricing models to retain existing clients and attract prospective clients may have an adverse impact on its business, financial condition and results of operations.
- Its results of operations and the company's key business measures are subject to quarterly variations that could cause fluctuations in its results of operations.
- Its efforts to diversify the company product portfolio through new initiatives may adversely affect its business operations, expenses and customer satisfaction.
- While its asset light model contributes to operating leverage and low capital requirements, it may also increase its dependency on various third parties for certain outsourced services, including designers, production houses, advertising platforms and other intermediaries required for advertising, data analytics and ground-based research. If the company does not manage to utilise these in a cost-effective manner, it may adversely affect its business and operating expenses.
- The company and its vendors are associated with industry associations like the Indian Newspaper Society ("INS"), Indian Broadcasting Digital Foundation ("IBDF"), and Advertising Agencies Association of India ("AAAI"). Any non-compliance with the rules laid down by these associations may adversely affect its business, reputation and revenue from operations.
- The company is dependent on information technology systems and any cybersecurity breaches could adversely impact its reputation, operations expenses and profits.
- Its Promoters, key managerial personnel and senior management play a key role in its functioning and the company heavily relies on their knowledge and experience for its business performance and growth aspects. Its inability to retain, or hire, train and motivate equally capable personnel may adversely affect its business, results of operations.
- The Company's financial performance and growth are significantly dependent on the sustained profitability and operational success of its Subsidiaries and in the event of any downturn in one or more of its key Subsidiaries, its ability to invest in new ventures, service debts, or maintain operational efficiencies may be compromised, which could lead to adverse effects on its business, financial condition, and results of operations.
- The company or its business partners might have to comply with certain obligations or industry standards regarding security, data protection, and privacy, and any failure to comply with these requirements might have an adverse effect on its reputation, business, financial condition and operating results.
- The advertising, data analytics and market research industries require considerable human resources, which may adversely affect its business and operational expenses. Further, the company inability to hire, retain, train, and motivate qualified personnel could adversely affect its business, results of operations, and financial condition.
- The company has not been able to invest into its proposed objects during the last three Fiscals, as this proposed use of proceeds represent a strategic redirection from its financial allocation patterns observed over the past three fiscal years. Therefore, there exists a risk that its current strategic focus, as funded by this Offer, may not align with the rapidly evolving market trends and customer preferences, or that the company may fail to successfully implement these new initiatives, which could lead to reduced competitiveness and market share.
- If the company is unable to maintain and enhance its brand name and reputation, due to any negative backlash from advertising and social media campaigns that the company is routinely engaged in or any other similar factors, it may have a material adverse effect on its revenue and cost of operations.
- While the company has paid dividends during the six months ended September 30, 2023, the financial years ended March 31, 2023, March 31, 2022, and March 31, 2021, respectively, its ability to pay dividends in the future will dependa on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
- The company collect data from third parties like publishers, web browsing platforms or other software developers, and hence would be affected by availability of customer consent which could potentially result in a decrease in client satisfaction, a decline in its competitive positioning, and may result in a reduction in its revenue and profitability.
- Certain of its Group Companies and the company Promoter, Narasimhan Krishnaswamy are engaged, or are authorized by their constitutional documents to engage, in business activities which are similar to those undertaken by the Company and Subsidiaries, which may result in conflicts of interest.
- Its Promoters and Promoter Group will be able to exercise significant influence and control over it after the Offer and may have interests that are different from or conflict with those of its other shareholders.
- Its business is currently concentrated in India and the company has begun entering into foreign markets, including the middle east and neighbouring nations. Expansion into new geographies will cause it to incur significant costs, forex exposure and face regulatory, personnel and cultural challenges which may adversely affect its operational expenses.
- The Company, Directors, Promoters, Subsidiaries are or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company depends on its relationships with various newspapers, media channels, advertising platforms and creative talent to for its advertising and marketing offerings. Any strain in such relationships, may adversely affect its business, operational expenses and results of operations.
- If the company does not consistently diversify its products and services, its may not remain competitive in the advertising and marketing industry. However, its efforts to diversify the company product portfolio through new initiatives may adversely affect its business operations, expenses and customer satisfaction.
- The company is unable to trace some of its historical corporate records of the company filings with the RoC and there has been an inadvertent error in one of its form filings with the RoC. The company has received certain observations in the secretarial audit on the same.
- The company operates in a rapidly evolving media landscape including digital, print, TV, etc. If the company is unable to adapt and manage this landscape, it may adversely affect its business and revenue from operations.
- Though its integrated business model provides the opportunity for clients to engage its service across verticals, its may not be able to effectively cross-leverage its diverse offerings to clients due to a variety of reasons outside of the company control. This may adversely affect its growth prospects.
- The company operates a network of computer aided telephonic interviews ("CATI") and customer experience centres that require us to comply with data privacy regulations other data protection measure which could impose significant compliance burden and may adversely affect its business and profit margins.
- Because the company operates in a competitive industry, its revenues, profits or market share could be affected if the company is unable to compete effectively.
- Its business depends on the company's ability to deliver and maintain the quality of content for its clients and publishers. If the company is unable to consistently deliver, maintain its standards and achieve the resulted oriented objectives, it may adversely affect its reputation and customer satisfaction.
- Despite the expected market growth in the advertising, data analytics, and market research industries in India, the company cannot guarantee that the company will be able to capitalise on these, which may adversely affect its business and growth prospects.
- The company relies on its field infrastructure for collection, tabulation, classification and data inferences. The information provided by its field force is critical, and hence, the company may need to invest regularly in their training and professional development, which may adversely affect its operational expense and profit margins.
- There was a reduction in cash generated from operations for six months ended September 30, 2023 and in Fiscal 2023 as compared with Fiscal 2022. Similar fluctuations in operating cash flows could affect its results of operations in the future.
- Often clients' feedback requires it to make multiple iterations of client project or may increase scope of projects without explicit commercial understanding, requiring additional manhours and increased production costs, which may adversely affect its operational expenses, profit margins and customer satisfaction.
- Lack of a clear marketing strategy could have an adverse effect on its financial conditions and results of operations.
- Due to low entry barriers in the marketing and advertising industry, the company is constantly competing with new entrants providing niche services. If the company is unable to manage this competition, its may be unable to retain the company market share, reputation and revenues.
- Industry information included in this Red Herring Prospectus has been derived from an industry report prepared by CRISIL MI&A exclusively commissioned and paid for by it for such purpose and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- Failure to obtain or renew approvals, licenses, registration and permits to operate its business in a timely manner may adversely affect the company operations.
- If the company is unable to protect its intellectual property, or if the company face allegations of infringing others' intellectual property, its business, the company reputation, results of operations, cash flows and financial condition could be adversely affected.
- The company is unable to trace copies of the final approval received by the Company from the RBI, in respect of the transfer of certain equity shares to BBDO Asia Pacific Limited.
- Its Promoters, who also serve as directors, hold Equity Shares in the Company and are therefore interested in the company performance in addition to their remuneration and reimbursement of expenses.
- The company does not own its branch offices, including its Registered Office and Corporate Office. Any termination or failure by it to renew the lease and license agreements in a favourable and timely manner, or at all, could adversely affect its business and results of operations.
- Its funding requirements and proposed deployment of the Net Proceeds are not appraised by any independent agency and are based on management estimates and may require change based on various factors, some of which are beyond its control, subject to certain compliance requirements, including prior shareholders' approval.
- The Offer Price, market capitalization to revenue from operations multiple and price to earnings ratio based on the Offer Price of our Company, may not be indicative of the market price of the Equity Shares on listing.
- The company ha in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.
- The company has certain contingent liabilities which, if materialized, may adversely affect its financial condition.
- Any future issuance of Equity Shares, or convertible securities or other equity linked instruments by it may dilute investors' shareholding and sale of Equity Shares by the Promoters may adversely affect the trading price of the Equity Shares.
- Under Indian law, foreign investors are subject to investment restrictions that limit its ability to attract foreign investors, which may adversely affect the trading price of the Equity Shares.
- QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after the submission of their Bid, and Retail Individual Investors are not permitted to withdraw their Bids after closure of the Bid/ Offer Closing Date.
- Investors may be restricted in their ability to exercise pre-emptive rights under Indian law and thereby may suffer future dilution of their ownership position.
- The requirements of being a publicly listed company may strain its resources.
- The company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.
- Introduction of stricter norms regulating marketing practices by pharmaceutical companies could adversely affect its ability to effectively market in the pharmaceutical sector and to medical professionals, thus may adversely affect its results of operations and customer base.
- Its insurance policies may not be adequate to cover all losses incurred in its business. An inability to maintain adequate insurance cover to protect it from material adverse incidents in connection with its business may adversely affect its operations and profitability.
- If there is any change in laws or regulations, including taxation laws, or their interpretation, such changes may significantly affect its financial statements.
- The company may be subject to pre-emptive surveillance measures like Additional Surveillance Measure ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges which may adversely affect trading price of itd Equity Shares.
The Issue type of R K Swamy Ltd is Book Building.
The minimum application for shares of R K Swamy Ltd is 50.
The total shares issue of R K Swamy Ltd is 14706944.
Initial public offering of 14,733,883 equity shares* of face value of Re. 5 each ("Equity Shares") of R K Swamy Limited ("Company" or the "Issuer") for cash at a price of Rs. 288.00^* per equity share (including a share premium of Rs. 283.00 per equity share) (the "Offer Price") aggregating Rs. 423.56 crores* (the "Offer"), comprising a fresh issue of 6,033,883 equity shares* aggregating Rs. 173.00 crores* ("Fresh Issue") and an offer for sale of 8,700,000 equity shares* (the "Offered Shares") aggregating Rs. 250.56 crores* (the "Offer for Sale" and together with the fresh issue, the "Offer"), comprising 1,788,093 equity shares* by Srinivasan K Swamy aggregating Rs 51.50 crores*, 1,788,093 equity shares* by Narasimhan Krishnaswamy aggregating Rs. 51.50 crores*, 4,445,714 equity shares* by Evanston Pioneer Fund l.p. aggregating Rs. 128.04 crores* and 678,100 equity shares* by Prem Marketing Ventures llp aggregating Rs. 19.53 crores* (collectively, the ôselling shareholdersö).
The offer included a reservation of 287,356 equity shares*, aggregating
Rs. 7.5 crores^^* (constituting 0.57 % of the post offer paid-up equity share capital of the company, for subscription by eligible employees (the "Employee Reservation Portion"). The offer less the employee reservation portion is hereinafter referred to as the "Net Offer". The offer and the net offer constituted 29.18% and 28.61%, respectively, of the post-offer paid-up equity share capital of the company. The company in consultation with the book running lead managers ("brlms"), offered a discount of 9.38% (equivalent of Rs. 27 per equity share) on the offer price to eligible employees bidding in the employee reservation portion ("Employee Discount").
*Subject to finalization of basis of allotment.
^A Discount of Rs. 27 per equity share was offered to eligible employees bidding in the employee reservation portion
^^After employee discount