Startups across the world are never giving up on their ventures. Alphalogic Techsys is gearing up to go on India’s first startup Initial Public Offering on India’s The Bombay Stock Exchange (BSE)’s newly launched BSE Startups Platform. And this is coming soon: this Friday August 23, 2019.
Formed in 2016, Alphalogic Techsys has interests across segment such as mobile app development, web application development, business intelligence and data analytics. In the past, it offered services to the US government, Merck India, Payback Card and several other companies across India, Australia, US and the UK.
Here Is The Deal
- The BSE Startups Platform was started in 2018 with an aim to encourage new-age entrepreneurs to list their companies on BSE, which is India’s prominent stock exchange.
- This platform endeavors to strengthen the startup eco-system in the country, and Alphalogic Techsys Limited became one of the first two companies to qualify for listing on this platform.
- Alpha logic Techsys has fixed the issue price at Rs 84 ($ 1.18) per share.
- The minimum units for each purchaser of the startup’s shares is 1,600 shares. This will correspondingly require a minimum investment of Rs 1,33,400.($ 1,866.13)
- Alphalogic Techsy’s net profit more than doubled in Fiscal Year 19, which helped it report 40 per cent compounded annual growth rate in last 4 years.
- The pre-issue net worth of the IT company stood at Rs 2.22 crore ( $61,239.69) as per restated balance sheet for FY19. The startup’s total debt stood at Rs 1.21 crore ($ 33,378.39).
- Managing Director of the startup, Anshu Goel says the company plans to expand into new clientele and expand the team in order to leverage various organic and inorganic opportunities.
- The company lists Middle East, North Africa, Europe and Latin America as target geographies.
Alphalogic is a Software Solutions Company that delivers new-age solutions to its clients to help overcome business challenges and achieve their growth in this fast-changing digital world. The company has its development center in Pune, India, while its sales office is located in Arlington, USA. With a vast clientele in India and overseas, Alphalogic sees the opportunity of getting listed to the Bombay Stock Exchange a noteworthy milestone that can skyrocket their growth.
IPO On Stock Exchanges Designated Only For Startups Could Be An Alternative To VCs For African Startups
Nigeria
Indeed, African startups may begin to consider listing on their local stock exchanges where such structures exist.
For example, there is now a fourth board on the Nigerian Stock Exchange meant for small businesses and startups. The board, known as the Growth Board would offer them the opportunity to raise equities for their businesss. All the startups and the SMEs need to do is to obtain approval from the Nigerian Securities and Exchange Commission and then list their shares for public subscription.
The new framework for startups, SMEs at the Nigerian Stock Exchange (NSE), to be known as growth board, was recently approved by Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC).
The framework creates two segments on the growth board for start-ups, micro and small companies and medium-sized companies.
- Start-ups and small companies are denoted by market capitalisation of between N50million and N500million while medium-sized enterprises are companies with market capitalisation of between N500million and N4billion.
- Start-up and small companies are expected to be listed on the first segment, known as entry segment, while medium-sized companies will be listed on the second segment, known as standard segment.
- The growth board will be the fourth board at the NSE. There are three existing listing boards at the Exchange, including premium board-for large-cap companies that meet additional requirements on dedicated corporate governance assessment, main board- the general board for all companies that meet the specific stringent listing rules and alternative securities market (ASeM), which provides listing for quotable companies that cannot meet or sustain listing requirements for the main board.
South Africa
In South Africa too, there is no more waiting for years and centuries for startup IPOs to happen. Once startups raise funds through equity crowdfunding in South Africa, the startups’ shares automatically become tradable on the floors of South Africa’s Stock Exchange.
Here Is How Everything Is Going To Happen
- Africa’s first equity crowdfunding, Uprise.Africa, and South African alternative exchange ZAR X have come to an agreement that will see the mini stock exchange list any up-and-coming entities, which have already successfully raised capital via crowdfunding, and freely trade their shares on the open market.
- Not only could the arrangement be the funding gap filler that fledgling South African entrepreneurs desperately seek, but it could bring the local capital market to the people.
- The partnership also solves the fundamental flaw of all other pre-IPO models, Nel says, namely that once a company has issued the shares they remain fairly illiquid, with investors having their funds tied up until that company looks at going public.
- Tabassum Qadir, co-founder, and CEO of Uprise.Africa says they plan to conclude at least three deals a month.
“We are simplifying venture capital through this mutually beneficial partnership for both entrepreneurs and investors,” says Qadir.
Bottom Line
This listing by India’s Alphalogic Techsys shows continually expanding alternatives to traditional VC fund raising, which if properly exploited would boost the value of Africa’s startup ecosystem. Indeed, it is time for African startups to begin to look beyond the traditional VC funding market, and exploit such other alternatives as this. However, not many startup founders in Africa can afford to put themselves out for public scrutiny at the most crucial stage of their companies’ development – the growth stage. But this could still remain an alternative for many, courageous enough to toe the path.
Again, this will probably be one of the most risky investment vehicles ever, but it’s still a great idea that helps startups raise funds and allows non-affiliated, individual investors to invest into the startup and small business ecosystem.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.