March 27, 2011

Mumbai, October 13, 2011: SMERA has assigned its first grading of an equity offering under the SEBI guidelines. The rating – ‘IPO Grade 2’ has been assigned to the proposed initial public offering of Tejora Technologies Limited (TTL). SMERA assigns IPO gradings on a scale of one to five - with grade 5 indicating strongest fundamentals and grade one for the weakest.

A SMERA IPO grade is a representation of SMERA's current assessment of the fundamentals of the issuer concerned. SMERA’s IPO grading is the fundamental evaluation of a company’s public issue. It will help investors understand in a simple manner, the risks, if any, associated with the issue, to the extent they relate to the fundamental analysis of the issuer company. The grade assigned to any individual issue represents a relative assessment of the 'fundamentals' of that issue in relation to the universe of other listed equity securities in India.

SMERA IPO grading is not a comment on the prices of the security concerned and neither should it be construed as a recommendation to invest or not in that security. Also, the grading does not indicate about the likely listing prices of the security graded.

About SMERA

SME Rating Agency of India Ltd, the dedicated rating agency for the micro, small and medium enterprises sec­tor in India, has been regis­tered under Securities and Exchange Board of India (Credit Rating Agencies) Reg­ulations, 1999.

The SEBI registration makes SMERA the sixth rat­ing agency in India to rate is­sues related to capital market. The development has paved way for SMERA to rate the capital market instruments, such as, IPO, bonds, commer­cial papers, security receipts among others.

SMERA is Mumbai-based rating agency, incorporat­ed in August 2005 and is pro­moted by SIDBI, Dun & Bradstreet and other leading banks in India.

Tejora Technologies Limited

SMERA IPO Grading 2/5 (Below Average)
October 13, 2011

Grading Summary

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SMERA has assigned SMERA ‘IPO Grade 2’ (two on five) to the proposed Initial Public Offer (IPO) of Tejora Technologies Limited (TTL).SMERA assigns IPO Grading on the scale of IPO Grade 5 to 1, with Grade 5 signifying strong fundamentals and Grade 1 signifying poor fundamentals.

The ‘Grade 2’ indicates that the fundamentals of the issuer are below average as compared to its industry peers. This grade is not an opinion on the appropriateness of the issue price, its appropriateness in relation to the issuer fundamentals. Accordingly, the offer price for the issue could be higher or lower than the level justified by issuer’s fundamentals.  The grade is also not a recommendation to buy/sell or hold the graded instrument.

The grading is driven by susceptibility of TTL’s revenues and profitability to the cyclicality and geographic uncertainties in the IT/ITes industry. Moreover, the company’s business model and product mix are still evolving with most of the growth happening in the last two years. Profitability has shown a fluctuating trend. There is a high level of concentration with the top five clients accounting for over 95 per cent of revenues. The grading assigns reflects just adequate internal processes coupled with limited comfort regarding the contribution and independence of the directors as the decision making remains centralized. Finally, as the proposed issue represents a huge increase in operations from the current scale, the success of the IPO will have a strong bearing on the TTL’s fortunes. A large part of the IPO proceeds are aimed to be deployed in purchase of office space and a potential acquisition.

TTL has demonstrated resilience by registering impressive growth in the last few years after a significant dip in its revenues post the financial crisis in 2008-09. It has a diversified end user industries and geographical presence, an ability to retain clients, well qualified senior management, cost flexibility, and good receivables management. The unaudited current year (2011-12) results for the first half year shows a good growth over last year and is in line with the projections for the full year.  For the half year ended September 2011, as per the management discussions, the revenues were Rs.50 crores. 

Going forward, TTL’s earnings prospects in the next few years will be critically dependant on its ability to scale up the human resources and systems.  TTL’s expansion plans are likely to face execution challenges.

About TTL and the issue

Tejora Technologies Limited, Mumbai based company was originally incorporated as ’RT Engines Software Private Limited’, a private limited company in the year 2003 by Mr. Nitin H. Shenoy and Mr. Haridas R. Shenoy. In 2011, constitution of the company was changed to ‘public limited company’ and the name was changed to Tejora Technologies Limited. Currently, the management is vested in the hands of Mr. Nitin H. Shenoy and Mrs. Surabhi Shenoy.

TTL provides outsourced software development services for mobile application, telecom and VOIP (voice over internet protocol) and social networking sites. Over the years, TTL has also developed a RFID-IPR (Radio frequency identification – Intellectual property right) and sold as Saas (Software as a service) through a re-seller agreement in UAE. The RFID-IPR caters to the oil and gas companies based at Jordan. Recently, TTL has added a business line of reselling softwares in Asia, mainly in the Banking, Financial services and Insurance (BFSI) vertical. Currently TTL caters to industries like Logistics & Transportation, Healthcare Services, Telecom & VoIP, BFSI, Education, and Manufacturing.  

In FY 2011 (Financial year ended March 31, 2011); TTL reported revenues of Rs. 35.02 crores, a growth of 60 per cent vis-à-vis FY 2010.  In the past, TTL has experienced a blip in revenues due to customer and geographic concentration and the economic sluggishness in the global markets. This resulted in deterioration in the company’s financial profile.In FY 2009, revenues slipped by 40 percent, fromRs.8.17 crores in FY 2008 to Rs. 4.82 crores in FY 2009.

TTL had negligible borrowings with a gearing of less than 0.1 time and low net worth (Rs. 12.09 crore) as at March 31, 2011. The profit after tax (PAT) margin is average and stood at 6.9 per cent for FY 2011.

For the six months ending September 2011, as per management discussions, the revenues have increased sharply to Rs. 50 crore (an increase of over 42 percent as compared to the full year FY 2011 revenue).

Through the IPO, TTL plans to issue 40 lakh shares and has outlined an expansion plan of Rs.20.23 crore for software development office, Rs.15 crores for proposed acquisitions, and Rs.10 crore for additional working capital requirements. 

For further information:

  

Analytical Contact Mr. Charu Sharma Head – Operations Ph:  022-6714 1130, 9820751853 Email – charu.sharma@smera.in Ms. Jyoti Punjabi Manager – Operations Ph:  022-6714 1133 Email – jyoti.punjabi@smera.in	Relationship Contact Mr. Sanjay Kher National Sales Manager – Special Products Ph:  09819136541, 022-6714 1200 Email - sanjay.kher@smera.in
Corporate Office: SME Rating Agency of India Limited, Unit No 102, First Floor, Sumer Plaza, Marol Maroshi Road, Marol, Andheri (East), Mumbai 400 059, Tel: 022 6714 1111, Fax: 022 6714 1142, Email – info@smera.in

Disclaimer

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SMERA IPO Grading is neither an audit of the issuer by SMERA nor a credit rating but an opinion based on the present assessment, research and result of fundamental analysis of the equity issue in relation to other Indian Listed securities. Grading is carried out relying on the factual information provided by the issuer and other sources considered to be relevant by SMERA. This grade is not an opinion on the appropriateness of the issue price, its appropriateness in relation to the issuer fundamentals. Accordingly, the offer price for the issue could be higher or lower than the level justified by issuer’s fundamentals.  The grade is also not a recommendation to buy/sell or hold the graded instrument.

SMERA IPO Grading is one-time assessment. While the grading itself is valid for a period of 6 months from the date of the issuance, the grading letter will have validity of 2 months from the date of the issue and would need to be revalidated after every two months.SMERA does not guarantee the completeness or accuracy of the information on which the grading is based.

SMERA and The Energy and Resources Institute (TERI) entered into a MOU on the 28th of April 2010 to jointly work in the area of environment protection by focusing on energy intensive sectors & measure the environmental sensitivity of MSMEs with the help of "Green Ratings". SMERA launched its "Green Rating" on the 2nd April , 2010 & the first Green Rating certificate was released at an event in Delhi by the Hon. Finance Minister. Under the MOU, SMERA and TERI have agreed to undertake joint studies/seminars/consulting assignments to address environmental concerns within the MSME sector

SME  Rating  Agency  of  India  Limited  (SMERA),  a  joint  initiative  of  Small Industries  Development  Bank  of  India,  Dun  &  Bradstreet and  leading  public and  private  sector  banks,  which  is  presently  offering  enterprise  ratings  to Micro,  Small  &  Medium  Enterprises  has  now  launched  rating  services  for Microfinance Institutions - (MFI).

Microfinance  sector  in  India  has  been  exhibiting  healthy  growth  over  past few  years  and  according  to  rough  estimates,  there  are  over  1000  MFI’s currently  operating  in  India.  In  the  financial  year  2007-08,  Microfinance  in India, through  its  two major channels  i.e. Self Help Groups & Bank Linkage Program  (SBLP),  and  Microfinance  Institutions  have  served  over  54.87 million  Indians  effectively.  MFI’s  have  the  potential  to  bring  about  inclusive growth by accessing and disbursing loans to the poor, thereby reducing their dependence  on  informal  credit  sector.  Besides,  MFI’s  have  enhanced awareness  of  relevant  local  issues,  encouraged  local  economic  activities, generated  employment  &  played  a  pivotal  role  in  community  development activities, social empowerment etc. 

Considering  the  relevance  of  MFIs  to  the  local  economy  and  heightened interest  of  international  funds  in  this  sector,  MFI  Ratings  have  become  an integral  part  of  MFI  assessment  process  in  confidence  building  exercise within the investors’ community, locally and overseas. 

Keeping in view the potential of MFIs to bring about inclusive growth in the country,  SMERA,  by  virtue  of  its  experience  to  assess  Micro,  Small  and Medium  enterprises  has  decided  to  launch  MFI  Rating  services  from  this year.  SMERA-MFI  Rating  is  an  independent,  third  party  comprehensive assessment  of  various  risks  involved  in  financial  as  well  as  social performance of a MFI.  The rating process would include submission of data by the applicant followed by the site visit and interaction with management.  The final rating assessment is undertaken by a committee and on finalization the rating is disseminated to the referrer.

SMERA  Rated  MFIs  would  be  allotted  a  D&B  D-U-N-S  Number  and  will  also be  featured  on  Dun  &  Bradstreet’s  Global  Database.  Such  profiling  of SMERA’s  MFI  Ratings  is  expected  to  enhance  credibility  of  MFI  within  the banking sector, social investing and other similar institutions not only in the domestic  market,  but  also  internationally.  Shri.  R.  M.  Malla,  Chairman SMERA, has expressed that SMERA’s banking linkages (11 promoter banks & 26  MOU  banks)  will  prove  beneficial  to  MFI’s  rated  by  SMERA  and  better rated MFI’s could benefit  by way of access to bank finance on better terms.

Reduction in GHGs emission and energy conservation is the new mantra to reduce the adverse effect of global warming. Considering the rapid climatic changes experienced globally in the recent past, various Government initiatives are underway to reduce the carbon emission in the atmosphere.

One such initiative "Green Rating" was launched by the SME Rating Agency of India Ltd-(SMERA) on the 2nd of April, 2010 during function arranged to celebrate SIDBI’s 20th Foundation Day. Hon’ble Union Finance Minister Padma Vibhushan Shri Pranab Mukherjee presented the first Green Rating Certificate to M/s Ultimate Alloys - Coimbatore.

Speaking at the event, Hon. Finance Minister stated that "The launching of "Green Ratings" by SIDBI, through its Associate - SME Rating Agency of India (SMERA), is truly an innovative initiative to sensitize MSMEs on the importance of becoming environmentally friendly and energy efficient. We all know about the adverse impact of global warming and climate change. MSMEs - owing to their sheer size and number, can be a positive catalyst in our battle against climate change. I would urge all the Banks and Financial Institutions to encourage their MSME clients to go in for Green Ratings"

During interactions with the media, Shri R M Malla, Chairman & Managing Director, SIDBI, stated that "Green Ratings from SMERA would enable SIDBI & other lenders to offer preferential interest rate to well rated SMERA Green units there by promoting investment in clean and energy efficient technologies in MSMEs

SIDBI has also launched a pilot scheme wherein units obtaining SMERA-Green Rating 1 & 2 would be eligible for interest rate concession of 50 bps and units obtaining rating of SMERA-Green Rating 3 would be eligible for interest rate concession of 25 bps.

In the media briefing Mr. Parag Patki, CEO, SMERA, mentioned that "SMERA has kick started this initiative in the steel sector & will continue its journey in assigning Green Ratings to newer sectors that are energy intensive. He further added that the rating process will be utilized as a tool to sensitize the Micro and Small enterprises in the country on the risk associated in continuing with their existing processes and technologies & importance of adopting energy efficient technologies from changing environmental compliance as well as energy efficiency perspective".

SMERA’s-Green Rating is an independent, third party comprehensive measure of units’ sensitivity towards environment and the affirmative action adopted by the unit to reduce energy consumption and emission. The rating methodology would include submission of data by the applicant followed by the site visit and interaction with management. The final rating assessment is undertaken by a committee comprising of external experts and on its finalization, the rating will be disseminated to the applicant.

The SMERA-Green Rating is on a scale of 1-5, wherein "SMERA-Green Rating 1" is the top most rating denoting the unit’s efficient usage of energy with minimal emission of GHG and adoption of processes to control air, water, and land pollution. "SMERA-Green Rating 5" indicates lowest grade on scale of 1-5 with the unit’s inefficient usage of energy due to its existing processes and technology causing severe damage to the environment.

About SMERA:

SME Rating Agency of India Limited (SMERA), a joint initiative of Small Industries Development Bank of India, Dun & Bradstreet Information Services India Pvt Ltd. and leading public and private sector banks, which is presently offering enterprise ratings to Micro, Small & Medium Enterprises, Ratings of Microfinance Institutions, Gradings of Greenfield & Brownfield Projects and Educational Institutions.

SMERA has completed ratings of over 6500 MSME since inception. SMERA has also taken the initiative of entering into MOU with more than 26 banks and lending institutions.

"Green Rating" Launched by Hon'ble Finance Minister Mr. Pranab Mukherjee

Mumbai, March 3, 2011: SME Rating Agency of India Ltd., the dedicated rating agency for the MSME sector in India, has been registered under Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999. SMERA is the 1st and only rating agency in the MSME space that is dedicated to increase the credit flow to the MSME sector. The Mumbai-based agency was incorporated in August 2005 and is promoted by SIDBI, Dun & Bradstreet and other leading banks in India.

The SEBI registration makes SMERA, only the sixth rating agency in India to rate issues related to capital market. SEBI registration has paved way for SMERA to rate  the capital market instruments, such as, IPO, Bonds, Commercial Papers, Security Receipts and others. The SEBI registration bestows higher credibility and acceptance for SMERA in the market.

Speaking on this development, Mr. Parag Patki, CEO, SMERA said, “Considering the high level of consistent GDP growth expected from the economy to provide sustenance to its expanding needs, it is natural that part of this responsibility will fall on the MSME sector. However, there are fears that the MSME sector will not be capable to fulfill this role due to limited access to capital for investing in capacity expansion or diversification. Keeping in view this limitation and capacity constrain within the rating industry, SEBI registration to SMERA is timely and opportune”.

“SMERA is committed to improve the rating penetration in the country for the systematic development of the capital market. SMERA Ratings would assist the Indian investors make suitable investment decisions for their risk profile”, he added.

About SME Rating Agency of India Ltd:

SME Rating Agency of India Ltd (SMERA), the dedicated rating agency for MSME sector in India was formally launched at the hands of the then Union Finance Minister, Shri P. Chidambaram, at a ceremony at Coimbatore on 5th September 2005.  SMERA has been set up by Small Industries Development Bank of India (SIDBI) in association with Dun & Bradstreet (D&B) and leading public and private sector banks. SMERA is the country’s first rating agency that focuses primarily on the Indian MSME segment.  SMERA’s primary objective is to provide ratings that are comprehensive, transparent and reliable.  This would facilitate greater and easier flow of credit from the banking sector to MSMEs.

SMERA is driven by institutions that are leaders in their respective spheres of activity.

• SIDBI is the principal financial institution for the promotion, financing and development of industry in the MSME sector in the country.  Over the last 15 years of its existence, it has developed a suite of products and services for the MSME sector.  SMERA will be able to draw upon SIDBI’s longstanding experience in dealing with Indian MSMEs and its strong relationships with public & private sector banks.
  
  
• Dun & Bradstreet (D&B) is the world’s leading provider of business information and Risk Management Solutions with a database covering over 120 million business entities.  Over the past 164 years, D&B has built up an impressive track record in SME Risk Evaluation & Rating and has over 70 million MSMEs in its global database.
  
  
• SMERA is also supported by several leading public and private sector banks that are active in the MSME space.  The recognition and acceptance of SMERA’s ratings within the banking sector would help MSMEs save time, effort and money while approaching different banks for credit. It would also simplify and quicken the process of lending to MSMEs, while simultaneously reducing lending costs to the sector as a whole.
  
  
• SMERA is a beneficiary under The World Bank led multi institutional "MSME Financing & Development Project" implemented by PMD-SIDBI
  
  
• SMERA has also undertaken Risk Profiling of 13 MSME Clusters as mandated by Indian Bank Association
  
  
• SMERA has completed 10,000 MSME ratings since its inception and have made significant impact in increasing lending to the MSME sector, besides providing other tangible as well in-tangible benefits to the rated MSME units. SMERA Ratings provide comfort to the lenders based on the structured, standardized, and thoroughly analyzed rating report on a unit. The confidence in SMERA Ratings is evident from the MOUs entered by 32 banks, financial institutions and trade associations with SMERA.
  
  
• SMERA offers ratings/grading services for MSMEs, such as: "SMERA Ratings under the Performance & Credit Rating Scheme" of NSIC, Green Ratings, Grading of Greenfield and Brownfield Projects, Rating of Educational Institutions, Microfinance Institutions and Maritime Training Institutes.