🟣 1. At a Glance
Meta Infotech Ltd is entering the SME bourse with an ₹80.18 Cr IPO — but 75% of it is just a promoter exit (OFS). The Mumbai-based cybersecurity company boasts high ROE and 44% revenue growth in FY25. But with a P/E of 21x, is this too steep for SME comfort?
💥 2. The Hook – Cybersecurity Stock, but 75% Exit?
A 25-year-old cybersecurity firm enters the IPO battlefield. Sounds solid, right?
End-to-end digital infra security, serving BFSI, IT, manufacturing clients.
But wait…
👉 ₹60 Cr is going to the promoter’s bank account (Offer for Sale)
👉 Only ₹20 Cr is fresh issue, and most of that is debt repayment
👉 And it’s priced at 20.96x P/E — SME market ke liye kaafi zyada hai!
💻 3. WTF Do They Even Do? (Business Model)
📍 Meta Infotech Ltd is a B2B cybersecurity service provider, offering:
- Network security & identity management
- SASE, cloud workload protection
- Endpoint detection, database security
- Email and application security
- 24/7 security operation support (AMC, implementation, training)
They’re not making the tools — they resell global cybersecurity products (OEMs) and implement/manage them for Indian clients.
Basically: A premium IT security VAR (value-added reseller) with managed services.
📈 4. Financials – Profit, Margins, ROE, Growth
Let’s run the 3-year numbers 📊
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 109.54 | 153.05 | 220.02 |
| EBITDA | 9.20 | 15.69 | 22.24 |
| PAT | 6.54 | 10.51 | 14.50 |
| Net Worth | 19.54 | 30.05 | 44.55 |
| Borrowing | 7.60 | 0.77 | 17.35 |
| ROE (%) | 33.5% | 35.0% | 38.9% |
| EBITDA Margin | 8.4% | 10.2% | 10.1% |
| PAT Margin | 6.0% | 6.8% | 6.6% |
✅ Revenue CAGR: ~42%
✅ PAT CAGR: ~48%
✅ ROE: 🔥 38.88%
⚠️ PAT margin < 7% → not SaaS-level juicy
⚠️ Debt jumped to ₹17 Cr in FY25 (hence IPO money going to repay)
📉 5. Valuation – Cheap, Meh, or Crack?
- IPO Price Band: ₹153–₹161
- Post Issue EPS (FY25): ₹7.68
- P/E at upper band: 20.96x
- Post-issue Market Cap: ₹303.99 Cr
- Price to Book: 6.37x
🧾 Fair Value Range (EduEstimate™)
Let’s give it:
- 13x–17x P/E based on high ROE but low PAT margins
- 4.5x–5.5x P/B for a B2B VAR (not pure SaaS)
👉 EduFair™ Range = ₹125 – ₹145
So IPO at ₹161 = 20–30% premium
Anchor nahi hai. Greed zaroor hai.
🔍 6. What’s Cooking – Triggers, Growth, Gossip
Objects of Fresh Issue:
- ₹16.7 Cr: Debt repayment
- ₹1.2 Cr: Office upgrade (Sahar, Andheri)
- ₹0.9 Cr: Experience centre
🧨 No expansion in capacity, no new verticals.
Just clean-up + branding.
📢 Growth will need to come from client expansion, not capex.
Also… 37.35 lakh shares are being sold via OFS = Exit party for promoter Venu Gopal Peruri.
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
FY25 debt jumped from ₹0.77 Cr → ₹17.35 Cr.
Likely to reduce back to ~₹1 Cr post-IPO, thanks to repayment.
Net Worth is healthy at ₹44.55 Cr.
Post IPO, this increases marginally (fresh infusion ~₹16 Cr)
⚖️ Final Debt/Equity → ~0.05 = very clean.
💸 8. Cash Flow – Sab Number Game Hai
No detailed cash flow data in DRHP. But…
- PAT ₹14.5 Cr
- Capex ₹2–3 Cr (minimal)
- Working capital likely stable
- Debt reduction → interest outflow down
🧮 Expect positive FCF of ₹10–12 Cr range post-IPO.
📊 9. Ratios – Sexy or Stressy?
| Ratio | Value | Verdict |
|---|---|---|
| ROE | 38.88% | 🔥🔥🔥 |
| ROCE | 37.81% | 🔥 |
| EBITDA Margin | 10.17% | Meh |
| PAT Margin | 6.63% | Meh |
| P/E | 21x | Expensive |
| Debt/Equity | 0.39 → 0.05 | 👍 Post IPO |
Conclusion: Profitability is solid. Valuation is the only speed breaker.
🧮 10. P&L Breakdown – Show Me the Money
For FY25:
- Revenue: ₹220 Cr
- EBITDA: ₹22.2 Cr
- EBITDA Margin: 10.1%
- PAT: ₹14.5 Cr
- PAT Margin: 6.6%
It’s a services business. Not SaaS, not product-led.
Margins are lean, and improvement is not exponential.
🧠 11. Peer Comparison – Who Else in Cyber Biz?
| Company | Rev (₹Cr) | PAT (₹Cr) | ROE | P/E |
|---|---|---|---|---|
| Saksoft (B2B IT) | 1,000+ | 120 | 22% | 22x |
| 3i Infotech (infra) | 700+ | -25 | — | — |
| Meta Infotech (SME) | 220 | 14.5 | 39% | 21x |
It’s small, profitable, growing fast. But it’s not a product-first techco.
Does it deserve SaaS multiples? Not yet.
🧙 12. Misc – Promoters, Shareholding, Listing
- Promoter: Mr. Venu Gopal Peruri
- Pre-IPO Holding: 94.94%
- Post-IPO Holding: 68.9%
- OFS by Promoter: ₹60 Cr worth of shares
- Listing on BSE SME
- Hem Securities as LM
SME listing = low liquidity
And with 75% of IPO as OFS, listing pop = speculative.
✅ 13. EduInvesting Verdict™
“Cyber Secure, But Investor Return?”
Meta Infotech Ltd is a fundamentally solid cybersecurity implementer with marquee clients and decent growth. But the IPO is:
- 75% OFS cash-out
- Priced at a 20–30% premium
- With no immediate expansion or innovation angle
🔐 This is not a scam. But neither is it a steal.
Unless it lists at a discount (👀), expect range-bound movement.
Verdict?
“Meta” toh hai, but not metaverse-level sexy.
Hold your firewall… and your funds 🧯
✍️ Written by Prashant | 📅 June 30, 2025
Tags: Meta Infotech IPO, SME IPO July 2025, Cybersecurity SME IPO, Hem Securities IPO, OFS-heavy IPO, Meta Infotech Valuation, IPO Analysis, IPO Grey Market, NSE SME Listing, Tech IPO SME
