EXATO TECHNOLOGIES LIMITED IPO Explain

Exato Technologies IPO Overview

AI-driven CX automation & digital transformation provider raising ₹37.45 cr via fresh issue ₹31.85 cr + OFS ₹5.60 cr of 26.75L shares. Price: ₹133-140. Lot: 1,000 shares (₹2.80L min). Vijay Kedia backed (4.71% stake). Funds for working capital (₹15.73 cr), product dev (₹6.80 cr), debt repayment (₹2.53 cr).

Lead: GYR Capital. Analyst: “Lucratively priced”. Client concentration (68-71%), negative cash flows, geographic concentration. Competes with Tech Mahindra, HCL, Wipro.

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	SME
IPO Open Date	28 November 2025 (Thursday)
IPO Close Date	2 December 2025 (Monday)
Anchor Investor Date	27 November 2025 (Wednesday)
Allotment Date	3 December 2025 (Tuesday) – Expected
Credit to Demat	4 December 2025 (Wednesday) – Expected
Refund Initiation	TBD
Listing Date	5 December 2025 (Thursday) – Tentative
Price Band	₹133 – ₹140 per share
Face Value	₹10 per share
Lot Size	1,000 shares
Min Investment (Retail)	₹2,80,000 (2 lots / 2,000 shares at upper band)
sHNI Investment	₹4,20,000 (3 lots / 3,000 shares) minimum
bHNI Investment	TBD
Issue Size	₹37.45 crore total
Fresh Issue	₹31.85 crore (85%) – 22,75,000 shares
Offer for Sale (OFS)	₹5.60 crore (15%) – 4,00,000 shares by promoter Appuorv K Sinha
Total Shares Offered	26,75,000 equity shares
Listing	BSE SME (Emerge Platform)
Post-Issue Market Cap	~₹133-140 crore (at upper price band)
P/E Ratio	~9-10x (FY25 basis – very attractive!)
EPS	₹13.86 (basic, FY25)
NAV	₹55.56 per share
ROE	28.13% (FY25) – Excellent!
ROCE	26.38% (FY25) – Very strong!
Expected Listing Price	₹215-235 (53-68% gains expected)
Anchor Investment	₹10.65 crore raised from anchor investors on Nov 27 (7,61,000 shares – 28.45%)

Issue Break-up

Category	Allocation	Shares	Percentage
QIB (Qualified Institutional Buyers)	12,69,000 shares (ex-anchor: 5,08,000)	47.44% (18.99% ex-anchor)
NII (Non-Institutional Investors)	3,82,000 shares	14.28%
Retail Individual Investors	8,90,000 shares	33.27%
Anchor Investors	7,61,000 shares	28.45%
Market Maker	Giriraj Stock Broking Pvt. Ltd.	~5%

Note: Strong anchor allocation (28.45%) with ₹10.65 cr commitment. Standard SME IPO allocation pattern.

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹31.85 crore / ₹3,185 lakhs) will be used for:

Funding Working Capital Requirements – ₹15.73 crore (49.4%)
- Support larger ticket projects
- Manage longer receivable cycles typical of enterprise CX projects
- Day-to-day operations and inventory management
Investment in Product Development – ₹6.80 crore (21.4%)
- Further building out Exato’s product stack and IP
- Enhancing Exato IQ platform capabilities
- AI/ML algorithm improvements
- New feature development for competitive advantage
Repayment/Prepayment of Borrowings – ₹2.53 crore (7.9%)
- Debt reduction from banks and financial institutions
- Outstanding debt: ₹27.98 crore as of September 30, 2025
- Deleveraging to reduce finance costs
General Corporate Purposes – Balance amount (~21.3%)
- Brand building, hiring, tech infrastructure, contingencies

OFS Proceeds (₹5.60 crore):

Goes to selling promoter Appuorv K Sinha
Partial exit/liquidity for promoter
4,00,000 shares being sold

Strategic Focus:

Working capital (49.4%) to support enterprise deals with long payment cycles
Product development (21.4%) to strengthen IP and platform capabilities
Minimal debt repayment (7.9%) – debt not a major concern
85% fresh proceeds for genuine growth

Note: 85% fresh issue for growth, 15% OFS for promoter partial exit.

Lead Managers & Registrar

Book Running Lead Manager (BRLM):

GYR Capital Advisors Private Limited
Contact: Mohit Baid, Neelam Gurbaxani
Phone: +91 87775 64648
Email: [email protected]
Track Record: Active in SME IPO space

Registrar:

KFin Technologies Limited
Phone: 040-6716 2222, 040-7961 1000
Email: [email protected]
Website: https://ipostatus.kfintech.com/

Market Maker:

Giriraj Stock Broking Private Limited

Promoters & Management

Key Promoters – Sinha Family (2 Promoters):

Mr. Appuorv K Sinha – Promoter
- Key leadership position
- Selling 4,00,000 shares in OFS (₹5.60 cr)
- Pre-IPO holding: 75.85% along with Mrs. Swati Sinha
Mrs. Swati Sinha – Promoter
- Family promoter
- Pre-IPO holding: 75.85% along with Mr. Appuorv K Sinha

Strategic Investor:

Mr. Vijay Kedia and Family – 4.71% equity stake (pre-IPO)
- Ace investor backing adds significant credibility
- Renowned for successful stock picking track record
- Kedia’s involvement signals confidence in business fundamentals

Company History:

Founded 2016 (Incorporated) – 9 years old
Operations: AI-driven digital transformation, customer experience automation, omnichannel communication platforms, cloud-based infrastructure solutions
Headquarters: Noida, Uttar Pradesh
Evolution: From CX solutions provider to comprehensive CXaaS and AaaS platform
Key Partnership: NICE Ltd.’s Platinum Partner in South Asia and Middle East regions
Geographic Footprint: India, United States, Singapore
Workforce: 60+ engineers in India
Client Base: 150+ clients across 10+ countries
Order Book: ₹515 crore as of October 31, 2025 (robust pipeline!)

Company Contact:

Registered Office: A-33, 2nd Floor, Sector-2, Noida, Gautam Buddha Nagar, Noida, Uttar Pradesh – 201301
Phone: +91 9810430894
Email: [email protected]
Website: www.exato.ai
Workforce: 60+ engineers

COMPANY OVERVIEW

Establishment & Background:

Incorporated in 2016 (9 years old)
Industry: AI-Driven Customer Experience Automation & Digital Transformation
Headquartered in Noida, Uttar Pradesh
Workforce: 60+ engineers in India
Strategic Backing: Vijay Kedia and family (4.71% stake) – renowned ace investor
Key Partnership: NICE Ltd.’s Platinum Partner in South Asia and Middle East regions

Business Model:

Customer Transformation Partner providing technology-driven solutions
Three Core Service Lines:
1. CX & Analytics (73.61% of revenue as of Sep 30, 2025) – Primary revenue driver
  - Customer Experience-as-a-Service (CXaaS)
  - AI-as-a-Service (AaaS)
  - Digital CX automation
  - Virtual assistants and chatbots
  - Omnichannel engagement platforms
  - Sentiment analysis and customer insights
2. Unified Communications and Infrastructure (25.74% of revenue) – Secondary business
  - Unified Communications-as-a-Service (UCaaS)
  - Cloud-based communication platforms
  - Voice, video, messaging integration
  - Contact center solutions
  - Infrastructure management
3. Exato IQ (0.65% of revenue) – Proprietary AI platform (nascent stage)
  - AI-powered analytics engine
  - Predictive insights
  - Automation workflows
  - Custom AI/ML models
  - Platform still in early commercialization phase
Target Industries:

BFSI (43.85% revenue, Sep 30, 2025): Banks, insurance, financial services
IT/ITeS & BPO/KPO (52.28% revenue): Technology and outsourcing companies
Telecom: Mobile operators, telecom service providers
Healthcare: Hospitals, clinics, health-tech
Retail: E-commerce, omnichannel retailers
Manufacturing: Industrial automation, smart factories
Geographic Revenue Mix:

Domestic India: 74.78% of revenue (Sep 30, 2025)
- Maharashtra: 32.95% (largest contributor)
- Other states
Export: 25.22% of revenue
- United States
- Singapore
- Other countries (10+ total)
Delivery Model:

Engineering team based in India (cost advantage)
Serving global clients remotely
On-premise installations when required
Cloud-based SaaS model for recurring revenue
Revenue Model:

Recurring service revenues (subscription-based CXaaS/AaaS)
Perpetual software and hardware income (one-time deals)
Professional services (implementation, customization, support)
Balanced mix providing revenue stability and growth

Market Position:

Positioned as AI-first CX automation specialist
NICE Ltd. Platinum Partner – prestigious recognition in CX space
Serving 150+ clients across 10+ countries
Strong order book of ₹515 crore (Oct 31, 2025) – 4x+ FY25 revenue!
Competing with larger players: Tech Mahindra, HCL Technologies, Wipro, Infosys, TCS (CX divisions)
Marquee client list: MakeMyTrip, RBL Bank, IGT Solutions, IKS Health, WNS
Long-term client relationships indicating stickiness

Operations:

Headquarters: Noida, Uttar Pradesh (tech hub proximity to Delhi NCR)
Workforce: 60+ engineers specializing in AI/ML, cloud, CX automation
Technology Stack: AI/ML frameworks, cloud platforms (AWS, Azure, GCP), omnichannel tools
Certifications: NICE Platinum Partner status
Robust Order Book: ₹515 crore pipeline (Oct 31, 2025) providing strong revenue visibility

Company Strengths

Explosive Profit Growth – Revenue +9%, PAT +84% (FY24 to FY25):
- FY25 revenue: ₹124.23 cr (+9.06% vs ₹113.91 cr FY24)
- FY25 PAT: ₹9.75 cr (+83.8% vs ₹5.30 cr FY24) – nearly doubled!
- Three-year revenue trajectory: ₹72.76 cr (FY23) → ₹113.91 cr (FY24) → ₹124.23 cr (FY25) – 70% growth in 2 years
- Three-year PAT: ₹5.06 cr (FY23) → ₹5.30 cr (FY24) → ₹9.75 cr (FY25) – 93% growth
- PAT margin expansion: 6.95% (FY23) → 4.65% (FY24) → 7.85% (FY25) – improving profitability
- EBITDA margin: 12.64% (FY25) – healthy for services business
Very Strong GMP (₹75-95) – 53-68% Expected Listing Gains!:
- GMP of ₹75-95 as of Nov 25-28 – exceptionally strong grey market demand
- 53-68% premium over upper price band of ₹140
- Expected listing price: ₹215-235 (based on GMP)
- High of ₹95 on Nov 27, low of ₹75 on Nov 26
- Indicates very strong investor confidence and demand
- Potential for significant Day 1 listing gains
- One of the highest GMPs in current SME IPO pipeline
Ace Investor Vijay Kedia Backing – 4.71% Stake!:
- Strategic validation: Vijay Kedia and family hold 4.71% equity (pre-IPO)
- Kedia is renowned for successful long-term stock picks (Atul Auto, Tejas Networks, etc.)
- His involvement signals strong confidence in business fundamentals and growth potential
- Adds significant credibility and investor confidence
- Kedia known for thorough due diligence before investing
- His stake likely to remain post-IPO (no OFS from Kedia family)
NICE Platinum Partner – Prestigious Strategic Partnership:
- Exato is NICE Ltd.’s Platinum Partner in South Asia and Middle East regions
- NICE is global leader in cloud and on-premises enterprise software (cloud CX, AI, compliance)
- Platinum status = highest partner tier, reserved for top performers
- Access to NICE’s cutting-edge CX technology, training, and go-to-market support
- Enhances credibility with enterprise clients
- Competitive moat through exclusive partnership benefits
Massive Order Book – ₹515 Cr Pipeline (4x+ FY25 Revenue!):
- Robust order book of ₹515 crore as of October 31, 2025
- 4.1x FY25 revenue – exceptional forward revenue visibility
- Provides strong growth trajectory and predictability
- Mix of recurring and perpetual revenue
- Enterprise deals with long-term engagement cycles
- De-risks near-term revenue concerns
Excellent Return Ratios – ROE 28.13%, ROCE 26.38%:
- ROE: 28.13% (FY25) – outstanding return on equity
- ROCE: 26.38% (FY25) – strong return on capital employed
- Both metrics significantly above industry averages
- Indicates efficient capital allocation and high profitability
- Asset-light model with minimal capex requirements
- High margins and strong cash generation potential
Attractive Valuation – P/E ~9-10x for High-Growth CX Tech:
- Issue priced at P/E of ~9-10x (FY25 basis) – extremely attractive!
- Analyst Dilip Davda verdict: “Issue appears lucratively priced“
- Recommendation: “Investors may park funds for medium to long term”
- IT services/CX automation typically trade at 15-30x P/E
- Fast-growing, high-margin, AI-driven business at value pricing
- Significant upside potential if growth sustains
- GMP (₹75-95) reflecting market recognition of undervaluation
Marquee Client Base – 150+ Clients Including MakeMyTrip, RBL Bank:
- Serving 150+ clients across 10+ countries
- Prominent clients: MakeMyTrip (travel), RBL Bank (BFSI), IGT Solutions (BPO), IKS Health (healthcare), WNS (BPO)
- Long-term relationships with enterprise clients
- Repeat business and referrals indicate satisfaction
- Diversified across industries: BFSI, IT/ITeS, telecom, healthcare, retail, manufacturing
- Cross-selling and upselling opportunities
Strong Anchor Support – ₹10.65 Cr Raised (28.45% of Issue):
- Significant institutional backing with ₹10.65 crore anchor investment
- 7,61,000 shares subscribed by anchors (28.45% allocation)
- Validates company fundamentals and growth story
- Provides stability and confidence for retail investors
- Reduces risk of under-subscription
Balanced Revenue Model – Recurring + Perpetual + Services:

Mix of recurring service revenues (CXaaS/AaaS subscriptions) and perpetual software/hardware sales
Recurring revenue provides stability and predictability
Perpetual deals add lumpy but high-margin income
Professional services (implementation, customization) for additional revenue
Balanced model reduces dependency on single revenue stream

Key Risks & Challenges

Extreme Client Concentration – Top 5 Clients 66-71% of Revenue:
- Top 5 customers accounted for:
  - 66.47% (₹47.23 cr) of revenue for period ended September 30, 2025
  - 68.25% (₹84.78 cr) in FY25
  - 71.70% (₹81.67 cr) in FY24
  - 66.40% (₹48.31 cr) in FY23
- No exclusive arrangements with these customers
- Loss of even 1-2 major clients = catastrophic revenue impact
- Competitors can attract them with better pricing or technology
- Customer bargaining power very high
- Business sustainability heavily dependent on handful of relationships
Heavy Industry Concentration – BFSI + IT/ITeS 96% of Revenue:
- BFSI sector: 43.85% of revenue (Sep 30, 2025), 37-49% historically
- IT/ITeS & BPO/KPO: 52.28% of revenue (Sep 30, 2025), 41-56% historically
- Combined 96%+ revenue from just 2 industries!
- Vulnerable to industry-specific downturns:
  - BFSI: Regulatory changes, banking crisis, credit tightening
  - IT/ITeS: Outsourcing slowdown, client budget cuts, competition
- Any sector-specific disruption = severe business impact
- Limited diversification despite serving multiple industries
Negative Operating Cash Flows – Major Red Flag Despite High Profits:
- Negative operating cash flow:
  - ₹11.36 crore (period ended September 30, 2025)
  - ₹14.12 crore (FY24)
- Indicates company is not generating cash from operations despite reporting profits!
- Suggests aggressive revenue recognition or high working capital blockage
- Cash flow problems = liquidity issues, inability to self-fund growth
- May require continuous external financing
- Inconsistency between reported profits and actual cash generation = major concern
Promoter Exit via OFS – ₹5.60 Cr Partial Exit at IPO:
- Appuorv K Sinha (Promoter) selling 4,00,000 shares
- OFS of ₹5.60 cr (15% of issue size)
- Promoters taking money off the table at IPO itself
- Questions: Why exit now if business poised for explosive growth with ₹515 cr order book?
- Signal of reduced confidence in future valuations?
- Only 85% proceeds go to company for genuine growth
- Partial promoter exit at listing not ideal for investor confidence
Geographic Revenue Concentration – 33-52% from Maharashtra Alone:
- Maharashtra contributed:
  - 32.95% (₹23.41 cr) of revenue for period ended September 30, 2025
  - 18.94% (₹23.53 cr) in FY25
  - 51.72% (₹58.91 cr) in FY24
  - 49.13% (₹35.75 cr) in FY23
- Single state concentration creates vulnerability
- Political, social, economic, environmental disruptions in Maharashtra = major impact
- Limited pan-India presence despite 9-year history
- Export only 25.22% – should be higher for tech services firm
Extreme Supplier Concentration – 88-98% from Top 10 Suppliers:
- Top 10 suppliers accounted for:
  - 97.65% (₹47.52 cr) of purchases for period ended September 30, 2025
  - 93.66% (₹81.51 cr) in FY25
  - 91.81% (₹85.23 cr) in FY24
  - 88.45% (₹51.94 cr) in FY23
- Nearly 100% dependency on limited suppliers!
- Likely software licenses from NICE, cloud providers (AWS/Azure/GCP), technology vendors
- Loss of key vendors = operational paralysis
- Delay in obtaining licenses = project delays
- Cost escalations cannot be passed to customers = margin compression
- Vulnerable to supplier pricing power
High Outstanding Debt – ₹27.98 Cr (Sep 2025):
- Outstanding financial indebtedness: ₹27.98 crore as of September 30, 2025
- IPO proceeds: Only ₹2.53 cr for debt repayment (9% reduction)
- Majority of debt remains post-IPO (~₹25 cr)
- Debt-to-equity: 0.75 (FY25) – moderate but not low
- Continuous servicing burden impacting profitability
- Failure to service debt = operational disruption
- Interest costs eating into margins
Currency & Forex Risk – ₹17.92-29.68 Cr Unhedged Exposure:
- Foreign exchange exposure:
  - ₹17.92 crore (period ended September 30, 2025)
  - ₹29.68 crore (FY25)
  - ₹6.84 crore (FY24)
  - ₹5.02 crore (FY23)
- Exposures unhedged or insufficiently hedged
- Volatility in INR/USD exchange rate = revenue and profitability impact
- Export revenue 25.22% in USD/other currencies
- Rupee appreciation = margin erosion
- Hedging contracts carry own risks and costs
Competitive Intensity – Fighting Giants in CX Automation Space:
- Competing with IT services behemoths: Tech Mahindra, HCL Technologies, Wipro, Infosys, TCS
- Specialized CX players: Genesys, Avaya, Five9, Freshworks
- Plus thousands of boutique CX solutions providers globally
- Price-based competition eroding margins
- Continuous innovation required to stay relevant
- Larger competitors have deeper pockets for R&D and client acquisition
- Differentiation difficult as everyone adopts AI
SME Listing Liquidity Risk – Lower Trading Volumes:

BSE SME listing = lower liquidity vs mainboard
Institutional participation limited
Trading volumes typically low
Wide bid-ask spreads
Exit opportunities constrained
Difficulty in selling large quantities
Longer gestation period for migration to mainboard

POSITIVE OUTLOOK: Analyst Dilip Davda states issue is “lucratively priced” and recommends “Investors may park funds for medium to long term.” Very strong GMP of ₹75-95 (53-68% premium) indicates high market enthusiasm. Backed by ace investor Vijay Kedia (4.71%), NICE Platinum Partner status, massive ₹515 cr order book (4x revenue), excellent ROE 28.13%, ROCE 26.38%, attractive P/E ~9-10x. KEY CONCERNS: Extreme client concentration (66-71% from top 5), industry concentration (96% from BFSI+IT/ITeS), negative operating cash flows (₹11.36 cr despite profits!), supplier concentration (98% from top 10), geographic concentration (33-52% Maharashtra), promoter partial exit (₹5.60 cr OFS), high debt (₹27.98 cr), forex risk (₹17.92 cr exposure).

Disclaimer: This information is based on publicly available sources including SEBI RHP filings, analyst reports, and company disclosures. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results. SME investments carry higher risks than mainboard listings.