Source: Research Department, Prime Bank Investment Limited (PBIL). Email: research@pbil.com.bd

IPO Profile of eGeneration Ltd

Key Particulars of the IPO

Ticker EGEN Offer Price (Tk.) 10.00 No. of Share (IPO) ( 20% ) 15,000,000

No. of Pre-IPO Share (80%) 60,000,000

No. of Post-IPO Share 75,000,000

Issue Size (Offer Price) (Tk) 150,000,000

Pre-IPO Paid-up Capital (TK) 600,000,000

Post-IPO Paid Up Capital (Tk) 750,000,000

Authorized Capital (Tk) 1,000,000,000

No. of Free Float Shares on Debut 15,000,000

%ΔYoY NPAT Growth (6m, 2020-21) (25%) Post-IPO EPS (6m, 2020-21) 0.65

Annualized EPS (12m, 2020-21) 1.30

Post-IPO NAVPs (6m, 2020-21) 20.34

PE at Tk 10 (Post IPO) 7.69

Company Overview

eGeneration Limited (EGEN) was incorporated as a Private Limited Company on 22nd November, 2003 and started it’s commercial operations on 1st Decem-ber, 2003. The office of the company is located at Sai-mon Center, Gulshan-1.

EGEN had partnered with different global companies such as Microsoft, SAP, Dell, Oracle, UiPath to provide end-to-end digital transformation solutions for differ-ent businesses organization as well as the Govern-ment. Major services of EGEN includes modern work-place solutions, enterprise resource planning, digital healthcare solutions, cloud services, cyber security, big data analytics, artificial intelligence, block chain, inter-net of things (Iot), robotic process automation, natural language processing and IT consultancy services

The company provides services in various sectors list extending from Banks and NBFIs, Manufacturing In-dustry, Education Sector, Healthcare Sector and Public Sector. Some of the renowned clients of the company includes: ICT Division of the Government of Bangla-desh, Bangladesh Army, Border Guard Bangladesh, Robi , bKash, BRAC University, S. Alam Group, Sonali Bank, Dutch-Bangla Bank, Pubali Bank, Bank Asia, Premier Bank, Dhaka Bank, Mercantile Bank, National Bank, Trust Bank, etc.

Name of Sponsors and Directors and Key Personnel

Name Position Post IPO %

Syeda Kamrun Nahar Ahmed, Chairman 8.00%

Shameem Ahsan Managing

Director 22.71%

SM Ashraful Islam ( repre-

sentative of eGeneration

Sourcing Limited )

Director 5.35%

Total 36.06%

Industry Overview

Major Products & Services Of the company:

Microsoft Solutions: Office 365, Share Point, Azure, Active Directory Domain Services, Microsoft Teams, and Microsoft Advanced Threat Analytics.

Data Analytics: Banking Analytics, Airline Analyt-ics, Media and Broadcasting Analytics, Analytics in Manufacturing, Price Recommendation Engine for e-Commerce

Data Centre Solutions: Cloud as a Service (CaaS),Infrastructure as a Service (IaaS), Platform as a Service (PaaS),

ERP Software: SAP Business One, SAP Education, SAP on Azure, SAP S/4 HANA.

Cyber Security Solutions: Licensing Partnership, VAPT, IT Audit.

Other Services: HR Management System, Digital

Platform Development, Block Chain Solutions, Network

Solutions, CRM Software, Fertilizer Recommendation

Solutions Software, IoT Solutions, AI & Natural Lan-

guage Processing software etc.

At present the ICT industry is becoming highly competi-

tive with over 400 registered members in BASIS. Cur-

rently the demand for software in the local market is

about $1.8 bn. In last 5 years the average growth rate of

the ITES industry was about 40 % which is expected to

continue further .The growth in this sector is mainly

driven by the large demand for IT automation in the do-

mestic market as well as export of software in the for-

eign countries. However, the ICT industry in Bangla-

desh, especially software and Information Technology

Enabled Service (ITES) industries, is relatively small

compared to the size of the national population and the

size of the national economy . Beside the different sec-

tors of our country are going through digitalization

phase. So, there is huge possibility for the companies

who all are currently working with Big Data, AI, Block

Chain and IoT as these are considered to be the future

of IT.

Source: Research Department, Prime Bank Investment Limited (PBIL). Email: research@pbil.com.bd

IPO Profile of eGeneration Ltd

NPAT & NPAT Growth (BDT mn)

Ratio 2019 2018 2017 2016 2020

ROA (%) 8.8% 12.3% 20.0% 19.9% 6.6%

ROE (%) 9.2% 14.4% 31.1% 27.5% 7.3%

Gross Profit Margin (%)

43.1% 46.6% 46.4% 50.7% 39.6%

Operating

Profit Margin

(%)

30.9% 35.7% 36.0% 37.1% 24.0%

Net Profit Margin(%)

30.0% 34.0% 36.0% 37.1% 23.5%

Financing of IPO Fund Revenue & Revenue Growth (BDT mn)

Use of the Proceeds of IPO

Financial Indicators

Return on Assets & Return on Equity

Gross Profit Margin & Operating Profit Margin

Particulars Amount (BDT) %

Purchase of Commer-cial Space for Office 80,000,000 53.33%

Loan Repayment 34,000,000 22.67%

Digital Health Care Platform Develop-ment

18,389,000 12.26%

IPO Expenses 17,611,000 11.74

Total 150,000,000 100.00%

Particulars No. of Ordi-

nary Shares

Issue

price

Issue Amount

(Taka)

Eligible

Investor

(EI)

MF & CIS 1,500,000 15,000,000

EI 4,500,000 45,000,000

General

Public (GP)

GP 7,500,000 75,000,000

NRB 1,500,000 15,000,000

Total 15,000,000 150,000,000

146

241

309

364

396

0.0%

10. 0%

20. 0%

30. 0%

40. 0%

50. 0%

60. 0%

70. 0%

0

50

100

150

200

250

300

350

400

450

2016 2017 2018 2019 2020*

54

87

105

109

93

-20.0%

-10.0%

0.0%

10. 0%

20. 0%

30. 0%

40. 0%

50. 0%

60. 0%

70. 0%

-

20

40

60

80

100

120

2016 2017 2018 2019 2020*

19.9

%

20.0

%

12.3

%

8.8%

6.6%

27.5

% 31.1

%

14.4

%

9.2%

7.3%

0.0%

5.0%

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

2016 2017 2018 2019 2020*

ROA ROE

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

40. 0%

45. 0%

50. 0%

55. 0%

2016 2017 2018 2019 2020*

Gross Profit Margin (%) Operating profit Margin (%)

Revenue Contribution

Particulars Amount (BDT) %

Solutions Developed in Microsoft Plat-form

226,364,111 57.12%

ERP Software 106,747,702 26.93%

Digital Platform Development 28,926,021 7.30%

Database Solutions 8,789,571 2.22%

Data Center Solution 6,500,000 1.64%

Data Analytics 6,410,000 1.62%

Others 12,583,722 3.18%

TOTAL 396,321,127 100.00%

Source: Research Department, Prime Bank Investment Limited (PBIL). Email: research@pbil.com.bd

IPO Profile of eGeneration Ltd

Key Observations

Post IPO total shareholding percentage for the

sponsors and directors of eGeneration Limited

would stand at 36.06%.

The company enjoys various tax benefits which

includes:

i. Income tax exemption on Software & ITES

till 2024

ii. VAT exemption rule & Submission proce-

dure for Software/ITES Exporters

iii. VAT Exemption for Software at Import and

Production Level

Both ROA and ROE is in declining trend since 2016.

The ROA has dropped to 6.6% in 2020 from 19.9%

in 2016 and ROE dropped to 7.3% in 2020 from

27.5% in 2016.

The YoY Gross Profit margin for the company

dropped 3.51%, mainly due to increase of cost of

sales caused by YoY increase of salary and allow-

ance expense by BDT 2.36 cr (77.90% increase).

The Net Profit After Tax (NPAT) of the company

affected significantly and declined by BDT 1.59 cr

(14.56%) on YoY basis due to increase in financial

expense by BDT 1.02 cr (322.7%) and general and

administrative expense by BDT 0.63 cr (16.8%)

from the previous year.

As of Jun’20, In contrast with it’s equity the compa-

ny had a very negligible debt and its DE ratio was

0.10. In addition the company will repay 3.40 cr of

it’s debt from the IPO proceeds which will further

shrink the DE ratio.

In 2019-20 period, 84.05% of its total revenue

came from sloutions developed in Microsoft plat-

form (57.12%) and developing ERP Software

(26.93%).

Issue Date of Prospectus: December 03, 2020

Year End: June

Issue Manager: NRB Equity Management Limited

Auditor: Shiraz Khan Basak & Co.

Dividends Declaration

Market PE 15.47

Sectoral Avg PE ( IT ) 25.99

PE – AAMRANET 15.04

Price relative to different prices

Other IPO Details

Price 15 22.5 24.8 27.3 29.95 32.94

PE 11.5 17.3 19.0 20.9 23.0 25.3

PE relative to other companies

Year 2020 2019 2018 2017

Cash Dividend(%) - - - -

Stock Dividend(%) - - - 277.37%

Rahat-Ul-Amin Head of Research

Shakawat Hossain Research Analyst

Syed Reazul Haque Research Analyst

Samin Farhan Research Ass

Prepared By:

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