R K SWAMY IPO opens for subscription on March 4, 2024 and closes on March 6, 2024. The allotment for the R K SWAMY IPO is expected to be finalized on Thursday, March 7, 2024. R K SWAMY IPO will list on BSE, NSE with tentative listing date fixed as Tuesday, March 12, 2024.
R K SWAMY IPO is a book built issue of Rs 423.56 crores. The issue is a combination of fresh issue of 0.6 crore shares aggregating to Rs 173.00 crores and offer for sale of 0.87 crore shares aggregating to Rs 250.56 crores.
R K SWAMY IPO price band is set at ₹270 to ₹288 per share. The minimum lot size for an application is 50 Shares. The minimum amount of investment required by retail investors is ₹14,400. The minimum lot size investment for sNII is 14 lots (700 shares), amounting to ₹201,600, and for bNII, it is 70 lots (3,500 shares), amounting to ₹1,008,000.

Objective

The Offer comprises a Fresh Issue of up to ~ 6,006,944 Equity Shares, aggregating up to ₹ 1,730 million by Company and an Offer for Sale of up to 8,700,000 Equity Shares aggregating up to ~₹ 250.56 Crore by the Selling Shareholders.

The company will not receive any proceeds from the Offer for Sale.

The net proceeds of the Fresh Issue, will be utilized in the following manner:

• Funding working capital requirements of Company.
• Funding capital expenditure to be incurred by the Company for setting up a digital video content production studio (“DVCP Studio”).
• Funding investment in IT infrastructure development of Company, and Material Subsidiaries, Hansa Research and Hansa Customer Equity.
• Funding the setting up of new customer experience center ("CEC”) and computer aided telephonic interview centers (“CATI”) of Company.
• General corporate purposes.

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About R K SWAMY Limited

RK SWAMY is one of the leading integrated marketing service groups in India, offering a single-window solution for creative, media, data analytics and market research services.

Company RK SWAMY was founded by the late Mr. R K Swamy in 1973, and is led by Promoters, Srinivasan K Swamy (Sundar Swamy) and Narasimhan Krishnaswamy (Shekar Swamy), with extensive experience of over 45 years and 37 years respectively in the advertisement and marketing services industry.

SEGMENTS:

1. Integrated Marketing Communications,
   1. Creative and digital content
   2. Media
   3. Events and activation planning, buying, and executing.
   4. Others include public relations, social media management, pharmaceutical communication.
2. Customer Data Analytics and Marketing Technology
   1. Customer data analytics
   2. Delivery and management of customer experience
   3. Online reputation management
   4. Campaign management, campaign tracking.
   5. Customer relationship management tools
   6. Customer insights, dashboards
   7. Sentiment analysis
   8. Loyalty program management.
3. Full-Service Market Research and Syndicated Studies.
   1. Customer/ audience segmentation
   2. Consumer surveys
   3. Customer experience measurement
   4. Brand equity and customer satisfaction indices
   5. Consumer intelligence.

With 50+ years of service, company has a strong client base consisting of customers like Aditya Birla Sun Life AMC, Cera Sanitaryware, DRL, E.I.D.–- Parry (India) Limited, Fujitsu General (India), Gemini Edibles and Fats India Limited, Havells, Hawkins, Himalaya, HPCL, ICICI Prudential, IFB, Mahindra and Mahindra, ONGC, Royal Enfield, Shriram Finance, Tata Play, Ultratech Cement, and Union Bank of India.

Currently the company is present in 12 Indian cities, with 12 offices and 12 field locations, having experience in locations like Kochi, Kerala, and Hyderabad, Telangana. The company is moving ahead to this experience by commencing operations in Ahmedabad (Gujarat), Lucknow (Uttar Pradesh) and Jaipur (Rajasthan) to target new and emerging clients from these states. To capture the international market, company have established corporate and business presence in international markets such as Dubai and Bangladesh.

The marketing services market in India grew at a CAGR of 5.6% between the Fiscals 2019 and 2023, reaching ₹ 1,936 billion in the Fiscal 2023 and is expected to grow at a CAGR of 12.5 – 14.5% till Fiscal 2028. This growth was supported by marketing spends of Indian corporates, rise in revenue of companies and an increase in the gross domestic output in the economy.

Integrated Marketing Communication:

Market size of Integrated Marketing Communications in India was ₹ 931 bn. in FY23 as compared to ₹ 776.71 bn in FY19 growing at a CAGR of 4.6%. The industry is expected to grow at a CAGR of 13 - 15% to reach ₹1,700 - 1,800 billion by Fiscal 2028 on account of broader economic recovery and due to the shift towards digital advertising and spending, as internet subscribers rise.

Customer Data Analytics and MarTech

The market size of Customer Data Analytics and MarTech in India grew at a CAGR of 12.1% to ₹ 115.06 billion in FY23 & will grow at a CAGR of 13 - 15% to reach ₹ 200 - 230 billion by Fiscal 2028. The expanding digital ecosystem in India along with a growing emphasis on personalized client experiences and targeted marketing strategies has led to an increased demand for MarTech solutions.

Full-Service Market Research

The overall market size for Full-Service Market Research in India grew at 6.7% CAGR between the Fiscal 2019 and the Fiscal 2023 from ₹ 73.36 billion to ₹ 95.02 billion in Fiscal 2023 and is expected to grow at a CAGR–of 9 - 10% to reach ₹ 140 - 150 billion by Fiscal 2028 supported by growth in both syndicated reports and customized assignments, before shrinking as businesses declined in both the segments due to the pandemic.

RISK FOR THE ISSUE

• The company served 380+ clients in the last 6 months of FY24. Top 10 clients contribute to 42% of its revenue.
• If the company does not upgrade its technology or does not provide adequate data, it could affect customer satisfaction and eventually cost the respective business.
• Some of the routine services offered by the Company may be to publish its customers’ ads on print media, electronic media, and outdoors. All these services are subject to space availability, and spaces with high demand can severely increase costs.
• The company reserves spaces for its clients with media houses and other digital platforms. In March 2021, the Indian Newspaper Society passed a resolution that mandates marketing Companies to make payments within 60 days.
• The advertising industry is quite seasonal with 60-65% of annual revenue being generated from the third & fourth quarters of the year.
• Digital Marketing and Integrated Marketing Communications form a substantial part of its offerings and hence are the company's major source of income.
• R K Swamy collects data from third-party publishers, web browsing platforms or other software developers, and hence would be affected by the availability of customer consent which could potentially result in a decrease in client satisfaction.
• The company majorly operated in industries like: (i) Banking, Financial Services and Insurance (“BFSI”), (ii) Automotive, and (iii) Fast-moving consumer goods/consumer durables/retail/e-commerce.