Business Profile of the Mouri Tech Limited
Mouri Tech is a IT Solutions Company focuses on intelligent enterprise resource planning (iERP) solutions, including on-premise and cloud-based ERP systems, across various industries. They also provide enterprise digital transformation services, helping businesses design, build, automate, and modernize non-core processes. They offer infrastructure services, including cloud engineering, cyber security, and IT service management.
The company differentiates itself through domain expertise, technological capabilities, innovation culture, geographical reach, and a customer-centric approach. Its efficient global delivery model is enhanced by digital offerings like generative AI, conversational AI, immersive technologies, blockchain, and IIoT. The company has a strong market presence in India, with delivery centers strategically located. It operates in the USA, Europe, the Middle East and Africa, and India. The company has 2,203 IT professionals across 8 countries and focuses on research and development in areas with significant growth potential.
Mouri Tech Limited IPO Objective
As per the draft red hearing prospects, the IPO issue consists only of offer for sale.
- The OFS consists of up to XXXX Equity Shares aggregating up to Rs. 4, 400 million. Nothing from those proceeds of OFS will be allotted to company.
- Mouri Tech IPO offer only has fresh issue of Rs. 10, 600 million. As per DRHP document, the company aims to utilize IPO proceedings towards investment in subsidiary for payment of certain borrowings, funding its working requirement, for acquisition and general corporate purposes.
| Particulars | Amount to be funded from Net Proceeds |
| Investment in one of Material Subsidiaries, MT USA,
for the payment of certain outstanding borrowings |
1650 |
| Funding working capital requirements of Company | 1250 |
| Funding inorganic growth through unidentified
acquisitions and general corporate purposes |
XXXX |
| Total Net Proceeds | XXXX |
(₹ Million)
IPO Details of Mouri Tech Limited:
| IPO Open Date | Not yet declared |
| IPO Close Date | Not yet declared |
| Basis of Allotment | Not yet declared |
| Listing Date | Not yet declared |
| Face Value | ₹10 per share |
| Price | Not yet declared |
| Lot Size | Not yet declared |
| Total Issue Size | XXXX Equity Shares |
| Aggregating up to ₹15, 000 million | |
| Fresh Issue | XXXX Equity Shares |
| aggregating up to ₹ 4,400 million | |
| Offer For Sale | XXXX Equity Shares |
| Aggregating up to ₹10, 600 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Issue Price & Size: Mouri Tech Limited IPO
The issue price of Mouri Tech Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has both fresh issue of Rs. 440 crores as well as offer for sale of Rs. 1060 crores.
Launch Date of Mouri Tech Limited IPO
The IPO opening date of Mouri Tech hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Mouri Tech Limited Financial Statements
| Particular | FY24 | FY23 | FY22 |
| Income | |||
| Revenue from operations | 1141300 | 10997.8 | 8279.61 |
| Other income | 123.13 | 208.23 | 96.49 |
| Total income | 11536.13 | 11206.03 | 8376.1 |
| Expenses | |||
| Purchases of stock-in-trade | 30.8 | 168.05 | 194.93 |
| Changes in inventories of stock-in -trade | 27.95 | -28.11 | 0.69 |
| Employee benefits expense | 5432.63 | 5015.65 | 4043.13 |
| Finance costs | 57.77 | 78.38 | 107.38 |
| Depreciation and amortisation expense | 258.11 | 170.3 | 105.94 |
| Other expenses | 3493.01 | 3619.81 | 2324.03 |
| Total expenses | 9300.27 | 9024.08 | 6776.1 |
| Profit before tax | 2235.86 | 2181.95 | 1600 |
| Profit for the year | 1672.53 | 1599.47 | 1165.19 |
| Name of the company | Revenue from Operations for fiscal 2024 | EPS | NAV | P/E (x) | RoNW(%) Fiscal 2024 | |
| Basic | Diluted | |||||
| Mouri Tech | 11413 | 15.39 | 15.39 | 49.04 | - | 31.39% |
| Persistent Systems | 98215.87 | 72.44 | 71.07 | 317.6 | 73.04x | 22.81% |
| Mphasis | 132785.2 | 82.42 | 81.83 | 408.24 | 37.24x | 22.04% |
| Coforge | 91790 | 131.56 | 129.59 | 552.11 | 51.13x | 23.47% |
| Birlasoft | 52781.45 | 22.54 | 22.25 | 99.8 | 29.36x | 22.30% |
| Sonata Software | 86130.6 | 11.12 | 11.1 | 20.11 | 62.14x | 22.19% |
| Zensar Technologies | 49019 | 29.36 | 29.13 | 151.19 | 26.72x | 19.26% |
| Happiest Minds Technologies | 16246.6 | 16.73 | 16.73 | 100.03 | 48.17x | 16.73% |
Mouri Tech Limited Promoters & Shareholding
As of date, there are two promoters of the company.
The promoter along with promoter group in aggregate collectively holds 79.15% of the paid-up share capital of company.
| Name of the Promoter | Number of Equity Shares | % of pre-Offer
paid-up Equity Share |
Selling Shareholders |
| Promoters | |||
| Anil Reddy Yerramreddy | 3,02,59,400 | 26.88 | Aggregating up to ₹ 3,160 million |
| Sujai Paturu | 5,88,44,410 | 52.27 | Aggregating up to ₹ 6,150 million |
| Total | 8,91,03,810 | 79.15 | |
| Promoter Group members | |||
| Loukya Sai Yerramreddy | 46,79,000 | 4.16 | |
| Mourya Sai Yerramreddy | 46,79,000 | 4.16 | |
| Padmavathi Paturu | 5,27,550 | 0.47 | |
| Amar Paturu | 1,17,230 | 0.1 | |
| Saritha Paturu | 1,17,230 | 0.1 | |
| Sulochana Yerramreddy | 2,34,470 | 0.21 | |
| Kishore Kumar Reddy Yerramreddy | 1,17,230 | 0.1 | |
| Saroja Yarramreddy | 1,17,230 | 0.1 | |
| Rajani Yerramreddy | 1,17,230 | 0.1 | |
| Total | 10, 706, 170 | 9.51 | |
| Other Selling Shareholder | |||
| Srinivasu Rao Sandaka | 12, 401, 240 | 11.02 | Aggregating up to ₹ 1,290 million |
| Grand Total | 112, 211, 220 | 99.68 | |
Should You Subscribe to Mouri Tech Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Mouri Tech Limited:
Comprehensive Portfolio of IT Solutions and Services
iERPs require specialized skills, a learning curve, and combined industry, business domain, and technology expertise. However, they can help establish long-term relationships with customers and provide a deep understanding of their business landscape. Mouri tech knowledge serves as a strategic advantage, allowing us to upsell and cross-sell services across various business units. They offer a comprehensive portfolio of IT solutions and services in iERP and enterprise digital transformation, with the global technology market expected to grow at an 8.3% CAGR between 2024 and 2027.
Global Customer Base
Leveraging its diverse portfolio of services and domain expertise, the organization has established a global clientele through its IT solutions and services. Recurring revenues from key customers are generated by the organization's emphasis on customer loyalty and employee satisfaction. The company's diversification across various industries enables it to reduce the risks associated with industry-specific challenges. Diverse geographies, such as the United States, India, EMEA, and other nations, generate revenues for the organization.
The company maintained 337 active customer accounts as of FY24 with an active customer account. The company's commitment to innovation, reliability, and customer-centric approaches has contributed to its long-term relationships with enterprises across various industries.
| Location of Customers | FY24 | FY23 | FY22 |
| % to the Revenue from Operations | |||
| USA | 82.38% | 83.16% | 81.19% |
| India | 12.73% | 14.70% | 17.50% |
| EMEA | 2.78% | 1.57% | 1.32% |
| Others | 2.12% | 0.58% | NIL |
| Industry | FY24 | FY23 | FY22 |
| % to the Revenue from Operations | |||
| Business services | 14.21% | 20.00% | 11.55% |
| Energy & Utilities | 13.25% | 11.16% | 6.96% |
| Non-Profit & Public Sector | 12.71% | 12.58% | 16.89% |
| Professional Services | 9.70% | 8.20% | 12.48% |
| Hospitality, Media and Entertainment | 7.57% | 7.32% | 11.06% |
| Manufacturing | 7.44% | 5.41% | 6% |
| Logistics and Transportation | 6.70% | 8.49% | 8.36% |
| Automotive | 6.04% | 5.72% | 3.16% |
| Life Sciences | 4.78% | 4.40% | 3.27% |
| High Tech | 3.74% | 3.83% | 4.04% |
| Other | 13.79% | 12.89% | 16.23% |
Fast Growing Digital IT Services & Solutions Portfolio
The company provides a variety of digital services, such as enterprise software solutions, advisory, solution architecture, implementation, and support services. These solutions are customized to satisfy specific business needs and facilitate a "clean core" approach. A comprehensive view of consumer information is also provided by the company's integration of a top-tier customer relationship management platform. The company also provides a variety of services to help enterprises achieve their business goals while adhering to their budgets and schedules. The company also offers a digital transformation vertical, delivering digital product engineering, platform development, and advanced analytics to support businesses from concept to deployment. The company has developed a suite of enterprise automation solutions, including cognitive test automation and IoT-enhanced industrial automation. The company has developed capabilities across emerging technologies, such as generative AI, conversational AI, immersive technologies, and IIoT.
Strong R&D Capabilities
The company has developed over 2,600 IT assets based on its in-depth industry knowledge, technology, and business process expertise. These assets include templates, accelerators, frameworks, tools, products, process maps, best practices, performance metrics, industry solutions, assessments, and methodologies. The company aims to support customers' digital transformation initiatives by continuously developing and enhancing these assets to drive innovation, build a competitive edge, establish strategic relationships, and deliver superior value to customers.
The company has invested considerable resources in developing its IT assets to manage its delivery process and reduce risks, such as security breaches and cost overruns, while providing control and visibility across the project lifecycle stages.
Future plans
- They plan to open offices in Tier-1 and Tier-2 cities in India to increase its customer base and deepen existing relationships by attracting new customers with an annual contract value of over USD 1 million across different industries.
- The company focuses on providing additional services to existing customers, such as process automation, data analytics, and business intelligence, to grow and maintain their share of business and revenues.
- The company plans to create additional solutions in emerging technologies such as IIoT, cloud technology, business process automation, hyper automation, cyber security, machine learning, and artificial intelligence.
- The company plans to evaluate inorganic growth opportunities, such as mergers and acquisitions, acquisitions, and expansion into new geographies.
Risk Factors of Mouri Tech Limited:
Geographic concentration
As can be seen from data in table below, the company in past three years has generated more than 80% of its revenue from US customers. This concentration increases exposure to competition, negative implication arising from slowing economic growth in geography, political, and regulatory circumstances. Adoption of anti-sourcing laws in many countries, including the US, may limit customer engagement.
Potential competitors in India may increase their focus on the US market, potentially reducing the company's market share.
| Particulars | FY24 | FY23 | FY22 |
| Revenue from the customers located in the United States (₹ million) | 9401.49 | 9145.68 | 6721.9 |
| Percentage of the revenue from operations | 82.38% | 83.16% | 81.19% |
Client concentration
As can be seen from data mentioned in table below, the company generate significant portion o its revenue from its top 10 clients. Revenue concentration requires the business to maintain close relationships with its top customers for business growth and profitability.
However even after maintaining good relation, the volume and nature of work performed for a specific customer may vary from time to time. Slower economic activity, aggressive competition and reliance on a single customer may take away pricing leverage from them in contract negotiations. Loss of major customers or a significant decrease in outsourcing volume could negatively impact the company's business fundamentals and company’s financials.
| Particulars | FY24 | FY23 | FY22 |
| Revenue from top 10 customers located in the US (₹ million) | 4915.64 | 5202.6 | 3468.1 |
| Percentage of the revenue from operations | 43.07% | 47.31% | 41.89% |
Segment concentration
The company operates in four practice areas: iERP, enterprise digital transformation, infrastructure services, and program management. The table below shows revenues from these areas for fiscal years, expressed as a percentage of total revenue from operations. A decline in demand for solutions, particularly in digital transformation and iERP, could negatively impact the company's business fundamentals and overall financials. Over-reliance on a limited set of services exposes the company to risks associated with shifting customer preferences and emerging industry trends.
| Practice Areas | FY24 | FY23 | FY22 |
| % to the Revenue from Operations | |||
| Digital transformation | 44.04% | 42.56% | 38.45% |
| iERP | 41.32% | 42.04% | 43.62% |
| Infrastructure services | 5.72% | 6.47% | 8.35% |
| Program management and others | 8.92% | 8.93% | 9.58% |
Integration of acquired company
MT USA has acquired several companies to expand its offerings and gain new customers. The acquisitions aim to expand the company's offerings, acquire new customers, and diversify its offerings. If MT USA cannot integrate the acquired company successfully or fails to meet payment obligations, it may face legal proceedings for breach of the share purchase agreements. Failure to properly evaluate acquisitions or investments could result in the failure to realize anticipated benefits and potentially harm the company's growth strategy, market share, profitability, and competitive position.
Employee utilization
The success of IT Company relies heavily on the contributions of IT professionals, employee utilization and company’s ability to attract and retain qualified professionals. A significant increase in attrition rates among IT professionals with specialized skills could decrease our operating efficiency and productivity, potentially leading to a decline in demand for our services. Along with attrition rate, proper transition of employees on project plays important role in overall success. Employee shortages could prevent timely completion of contractual commitments, lead to contract or customer loss, and require deployment of more senior employees with higher rates, potentially adversely affecting profit margin and profitability.
During FY23 and FY22, the company experienced a high attrition rate due to a "great resignation" trend across the globe. High attrition rates and failure to attract, train, and retain IT professionals could negatively affect business, cash flows, financial condition, and results of operations.
Contracts with clients
Customers typically have agreements lasting between six months and five years. Revenue from these customers is categorized based on the years of relationship. Large and complex projects may involve multiple stages, and customers may choose not to retain us for additional stages or cancel or delay planned engagements. However, engagements are typically singular projects, and customers can terminate services agreements without cause.
Termination or non-renewal of contract by existing clients, could negatively impact revenue, cash flows, financial condition, and results of operations.
| Duration of relationship | FY24 | FY23 | FY22 |
| % to the Revenue from Operations | |||
| Less than 3 years | 33.24 | 38.15 | 49.28 |
| 3 to 5 years | 23.12 | 17.04 | 16.31 |
| 5 to 10 years | 41.13 | 42.51 | 30.99 |
| Above 10 years | 2.52 | 2.31 | 3.41 |
Anti-outsourcing legislation
In today’s time every country is trying to shore business near to its reach radar. So the debate over outsourcing services to foreign organizations is a significant issue in many countries, including the US. If enacted, it could lead to restrictive legislation, broadening restrictions on outsourcing by government agencies, impacting private industry with tax disincentives, intellectual property transfer restrictions, and restricting business visas. This could negatively impact customer service, business financial condition, cash flows, and results of operations.
Mouri Tech Limited Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Mouri Tech Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
