Aishwarya Telecom IPO Review: Finance Trading Times

Aishwarya Telecom IPO Review

A small IPO has come to the offering, but without much hype and hoopla.
It’s the Aishwayra telecom IPO.

What is the size of Aishwarya Telecom IPO?
The Aishwarya Telecom IPO plans to issue 4,000,000 shares.

What is the price band of the Aishwarya Telecom IPO?
Price band Aishwarya Telecom IPO is Rs 32-35.

Book Running Lead Managers?
Bigshare Services are the lead managers to the Aishwarya Telecom IPO.
IPO dates for Aishwarya Telecom IPO?
The offer is open from April 15-17.

Should I invest in Aishwarya Telecom IPO?
That’s the million dollar question. Experts say one should NOT invest in Aishwarya Telecom IPO. Primary concerns are Scalability risks, limited capacity to invest in newer technologies and competition from international players weigh against the company; these may limit its ability to take advantage of the growing telecom market.

How about PE or Price to Earnings Ratio of Aishwarya Telecom?
At the upper end of the price band — Rs 35 — the stock would trade at eight times its full year earnings. This is the valuation at which its listed peer, Aplab, with much larger revenues, trades.

Now as per the K. Venkatasubramanian from The Hindu
The business potential for test and equipment manufacture and services is high. The rapid mobile-services network expansion, helped by a burgeoning subscriber base, the impending announcement of 3G policy, ISP rollouts and healthy subscriber growth in DTH services, apart from the rollout of IPTV, WiMax, all create opportunities for test and measurement(T&M) vendors. But three factors would be critical for a company to tap this opportunity.
Top telecom service providers have their operations spread across the country.
The sheer pace of subscriber growth at 7-8 million per month has meant that operators are spending billions of dollars on network building and upgrades.
This level of operations requires T&M equipment providers to have high scalability to deliver across large regions and states.

Aishwarya, despite 12 years in existence in this space, remains relatively small-sized, with annualised revenues of about Rs 30 crore in the current year. This may largely be because Aishwarya has been a reseller of products of overseas players, with limited value-addition at its end.
The company has won deals from several operators over the years, but these have tended to be of very small size compared to the overall pie.
From having BSNL as its main client, the company has managed to diversify its offerings to cater to non-PSU operators, Defence and the Railways as well. But all these are at a nascent stage. Scale is required both in service delivery on imported equipment as well as in manufacturing of indigenous equipment.
Second, smaller players may also find it challenging to develop expertise and invest in technology — key requirements in this space. Possessing end-to-end capabilities and keeping pace with evolving technologies may be crucial for a player to move up the value chain.
In this respect, Aishwarya’s capability might be limited. The company has tied up with IIT Madras for developing new modules, which are at the cutting edge of research and in conformance to TEC standards. How this initiative pans out remains to be seen.
Third, competition from the market leader, Agilent Technologies, and fully integrated players may pose challenges. Agilent and players such as Rohde & Schwarz already have strong working relationship with BSNL as well as many private operators.
More and more IPO’s coming out everyday. Let’s see how the Aishwayra IPO performs in these market timings. Table of Contents
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