The Sodhani Academy of Fintech Enablers Ltd. IPO, focused on enhancing financial literacy and awareness, made a notable debut on the BSE SME exchange on Friday, September 20, 2024. The stock opened at ₹52, representing a 30% premium over its issue price of ₹40 per share. This strong market performance follows a highly successful subscription period, with the IPO being oversubscribed 40.40 times.

Company Overview

Sodhani Academy of Fintech Enablers is dedicated to providing training, consultancy, and learning services in the domain of financial literacy. The academy aims to empower individuals with the knowledge and skills needed to make informed financial decisions. Their services encompass a range of educational offerings designed to improve financial understanding and management among diverse audiences.

IPO Details:

IPO Size: ₹6.12 Crores

Shares Offered: 9.7 lakh shares (Fresh Issue) and 5.6 lakh shares (Offer for Sale)

Price Band: ₹40 per equity share

Lot Size: 3,000 shares

Minimum Investment for Retail Investors: ₹120,000

Minimum Investment for HNIs: 2 lots (6,000 shares), amounting to ₹240,000

SRUJAN ALPHA CAPITAL ADVISORS LLP was the book-running lead manager, Cameo Corporate Services Limited served as the registrar, and Prabhat Financial Services Limited was the sole market maker for the IPO.

Grey Market Premium (GMP) and Subscription

The IPO's Grey Market Premium (GMP) was anticipated to be in the range of ₹14 to ₹16, based on the company’s financial metrics. The actual listing price at ₹52 represents a 30% premium, highlighting strong investor confidence and interest.

As of September 16, 2024, the IPO was significantly oversubscribed, with a subscription rate of 40.40 times. This oversubscription underscores the high demand for financial literacy services and reflects positively on the company’s market appeal.

Financial Performance

Sodhani Academy has demonstrated steady financial performance over recent years. Their revenue increased from ₹188.19 lakhs in FY22 to ₹306.95 lakhs in FY24. EBITDA also showed stability, rising from ₹173.40 lakhs in FY22 to ₹241.27 lakhs in FY24. Similarly, PAT grew from ₹123.91 lakhs in FY22 to ₹183.17 lakhs in FY24.

Key Financial Metrics:

Revenue: ₹306.95 lakhs in FY24, up from ₹188.19 lakhs in FY22

EBITDA: ₹241.27 lakhs in FY24, up from ₹173.40 lakhs in FY22

PAT (Profit After Tax): ₹183.17 lakhs in FY24, up from ₹123.91 lakhs in FY22

Pre-issue EPS: ₹3.88

Post-issue EPS: ₹3.21

Pre-issue P/E ratio: 10.30x

Post-issue P/E ratio: 12.46x

The company’s Return on Capital Employed (ROCE) for FY24 stands at 36.77%, while Return on Equity (RoAE) is 32.33%, reflecting effective capital utilization and robust financial health.

Objectives of the IPO

The proceeds from the IPO will be utilized for the following purposes:

Building Content Studio and Offline Training Infrastructure: ₹80.00 lakhs will be allocated to developing facilities that support both online and offline training modules.

Information Technology Procurement: ₹60.00 lakhs will be used to purchase hardware and software necessary for enhancing technological capabilities.

Content Development: ₹50.00 lakhs will be invested in creating high-quality course material and educational content.

Brand Visibility: ₹35.00 lakhs will be dedicated to improving brand awareness and marketing efforts.

Learning Management System (LMS) Development: ₹10.00 lakhs will be spent on developing and enhancing the LMS application.

General Corporate Purposes: ₹75.00 lakhs will be used for various corporate needs and operational expenses.

IPO Allotment and Listing

The allotment of shares is scheduled to be finalized on Wednesday, September 18, 2024. Investors can check their allotment status on the registrar’s website by following these steps:

Visit the IPO allotment status page on the registrar’s website.

Select Sodhani Academy of Fintech Enablers Ltd. IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to check your allotment status.

Review and Recommendations

The IPO of Sodhani Academy of Fintech Enablers Ltd. was priced fairly, with a post-issue P/E ratio of 12.46x. The company's stable financial performance and significant oversubscription rate indicate strong market confidence. The listing at a 30% premium further reflects investor enthusiasm.

Given the IPO’s robust performance and the growing demand for financial literacy, the stock is a potential investment for those interested in the education and fintech sectors. However, investors should assess their risk tolerance and investment goals before participating, as market conditions can vary.

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