Visie Cyber Tech Limited

Visie Cyber Tech Limited

Issue Opens : 18th Sept., 2000 Issue Price: Rs. 10/- per share (FV Rs.10/-) Issue Size: 14,00,000 shares amounting to Rs.140 lakhs Registrars to the Issue:Aarthi Consultants Private Ltd.	Issue Closes: 25th Sept., 2000 Minimum Application: 200 shares @ Rs.5/- each Post-issue promoter’s stake: 9.38% Lead Managers: Aryaman Financial Services Ltd.
Recommendation : Average

Listing on: Hyderabad, Bangalore and Calcutta Stock Exchanges

Executive Summary

Click Here to Read the Analysis

Business

Industry Scenario

Financials

Project Analysis

Critical Success Factors

Competitive Position

Market Scenario

Recommendation

Business

Visie Cyber Tech Limited (VCTL) was started in 1997 by Mr.K.Srihari, Mr.Bhushan Karur, Dr.Philomena and Mr.Chakrapani. However, they sold the company to the present promoters - Mr.C.Ashok Vishnu and N.Surya Kumar. Ashok Kumar is a M.E.in Electronics and Communications and Surya Kumar has experience in software development in the areas of multimedia and client server technology based projects.

Visie was into providing software training but now develops various products in GIS, CAD/CAM.

Top

Industry Scenario

The Indian software industry generates revenues from Exports and domestically. The export revenue can be from onsite projects or from off shore activities. As regards the domestic market, products developed in the country are few in number. There are very few software companies that are engaged in product development. Ironically though, this is the best way to generate revenues and that too for longer periods of time.

Indian companies import software packages and provide some value addition to them. The also market imported software in the domestic market.

The Exports have been growing at an annual rate of more than 55 percent. Over the next 10 years, the domestic IT industry is projected to grow to $12 billion, which is almost 30 times the current size.

Top

Financials

The company's total revenues for FY98 was just Rs.1.88 lakhs, which grew to Rs.4.13 lakhs in FY2000. The net profit is also at very low levels of Rs.0.09 lakhs and Rs.0.80 lakhs for the same periods respectively. However, the company is quite optimistic and estimates the total income to rise to Rs.360 lakhs in FY2001.

Financial Performance(in Rs. lakhs)
Particulars	1997-98	1998-99	1999-2000	2000-01	2001-02	2002-03
Total Income	1.88	2.06	4.13	359.00	394.90	434.39
Net Profit	0.09	0.16	0.80	23.94	31.92	37.46
EPS (Rs.)	-	-	0.13	0.50	0.66	0.78

Top

Project Analysis

The issue proceeds will be used to set up software development and infrastructure facilities and to set up overseas office.

Fund Requirements
Buildings	Leased
Plant and Machinery	254.08
Furniture and Fixtures	20.19
Other Fixed Assets	18.33
Vehicles (Office cars)	7.00
Establishment of office at USA	57.40
Prel. and Pre operative expenses	17.90
Public issue expenses	20.00
Contingencies	15.60
Working Capital	90.50
Advanced and Deposits	29.00
Total	530.00

Top

Critical Success Factors

The company plans to market its products through tie-ups in the overseas office. Through their own web site, the company plans to present its services and products to the world.

Top

Competitive Position

The company has no products of its own. Though it is three years old, the profit levels are very low. The company is yet to launch its web site. The overseas offices are also new. Needless to say, the company competitive position seems to be quite weak.

Top

Market Scenario

The primary market had witnessed a boom at the beginning of this year when many companies came out with public issues at high premiums. The market has however now learnt to identify the good and high growth companies from the entire lot. While companies offering at par are still sailing through, the ones charging a premium need to be more careful. Companies like SIP Technologies have called off their IPOs due to poor response.

Top

Recommendation

The company is fundamentally weak. It has made projections of Rs.360 lakhs of revenue for FY2001, without any products of its own. This seems quite unrealistic. There is no mention of any concrete alliances either. Moreover, the pot-issue promoter;s stake is less than 10 percent. Investors are advised to be cautious.

Top