Meta Infotech

• Meta Infotech is coming out with an initial public offering (IPO) of 49,80,000 equity shares in a price band Rs 153-161 per equity share.
• The issue will open on July 4, 2025 and will close on July 8, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 15.30 times of its face value on the lower side and 16.10 times on the higher side.
• Book running lead manager to the issue is HEM Securities.
• Compliance Officer for the issue is Komal Toshniwal.

Profile of the company

Meta Infotech is involved in the business of providing cybersecurity solutions to various organizations across India. Founded in 1998 and transitioned into the cybersecurity domain in 2010. The company delivers comprehensive cybersecurity solutions and services for protection and maintaining integrity of information and systems. The company works for safeguarding the digital infrastructures of companies belonging to diversified industries such as Banking, Capital Market, NBFC, IT/ITES, Cybersecurity, Automobile, Insurance, Pharmaceutical, FMCG, Real Estate, Hospitality, Manufacturing and Other conglomerates etc. Leveraging its domain expertise, it provides end-to-end cybersecurity solutions designed to address the challenges faced by these sectors. By optimizing and securing network resources it enables organizations to manage their digital infrastructure effectively, ensuring reliable and scalable connectivity to support their evolving network needs.

It procures the cybersecurity products from various international OEMs who develop solutions to ensure secure access, defense for web applications, cloud workload protection etc. It has entered into agreements as authorized resellers with a various OEMs for distribution of cybersecurity products, softwares along with its licenses and subscriptions etc. It offers a holistic suite of services ranging from consulting to implementation, along with annual maintenance and sustenance, catering exclusively to the cybersecurity needs of its clients. Moreover, it also provides on-site resources along with training services to the organizations.

It operates from its offices situated at Andheri and Thane in Mumbai and at Hyderabad. Its experience over the years has helped it evolve its in-house training centre with a focus on creating fresh talent and internal talent augmentation for continuous improvement and growth. Its in-house training initiative helps it in on-boarding fresh talent along with tailored learning, skill development, retention and engagement, consistency and cost efficiency. With strategic locations in Mumbai and Hyderabad It is well-positioned to provide its clients with timely and efficient cybersecurity services, ensuring their operations are secured and resilient against evolving cyber threats.

Proceed is being used for:

• Repayment in full or in part, of certain of its outstanding borrowings
• Funding capital expenditure towards establishment of new office premises at Unit no 911, 9th Floor, MINT Sahar, Andheri - kurla Road, Andheri east, Mumbai
• Setup of an interactive experience centre at its registered office situated at Unit no 118 and 119, 1st Floor, Ackruti Star, MIDC, Andheri East, Mumbai 
• General Corporate Purpose 

Industry Overview

The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.5% of India’s GDP, as of FY23 and is projected to hit 10% by FY25. As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest Internet rates, with 76 crore citizens now having access to the Internet. The Indian IT industry’s revenue touched $227 billion in FY22, a 15.5% YoY growth and was estimated to have touched $245 billion in FY23. The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling $138.6 billion up from $124.7 billion last year. By 2025, the Indian software product industry is projected to hit Rs 8,68,700 crore ($100 billion) as companies seek to expand globally.

Meanwhile, Research and Development (R&D) in Cyber Security focusses on promotion of applied research in addition to futuristic and blue-sky research in the thrust areas of IoT, Hardware Security, End point security, Network and System Security, Cryptography, Cyber Forensics, Threat Intelligence etc. Grant-In-Aid support is extended to research and academic institutions to promote creation of R&D infrastructure, capacity building and enhancement of skills and expertise. Specific efforts are made to nurture institutions and capacity enhancement in the entire country. This has helped in establishing an ecosystem for cyber security startups & industry which resulted in production of indigenous state-of-the-art tools for forensics, device and end-point security, IoT Security, Threat Intelligence tools. Ongoing projects are reviewed periodically and follow up actions are taken. Efforts in the projects have resulted in the development of certain indigenous security solutions and technologies which are deployed/being deployed at various user organisations.

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling $138.6 billion up from $124.7 billion last year. India’s public cloud services market grew to $3.8 billion in the first half of 2023, expected to reach $17.8 billion by 2027. By 2026, widespread cloud utilisation can provide employment opportunities to 14 million people and add $380 billion to India's GDP.  

Pros and strengths

One Stop Shop for safeguarding the digital assets and infrastructure: With a focus on its customers’ needs, it offers end to end services right from advising clients on the appropriate product for serving their cyber security requirements to implementing and training employees of the organization. Its diversified solutions include Endpoint Security, Email Security, Data Security, Database Security, Network & Perimeter Security, Application Security, API Security, Cloud Security, Identity Security, Secure Access Service Edge (SASE), Security Information and Event Management (SIEM). Its range of solutions are bundled with service offerings like: implementation services, annual maintenance services, sustenance services, professional services, managed security services, training etc.

Catering to wide range of end use industries: Over the years the company has built expertise to provide products and solutions for cybersecurity for diverse range of end user customers finding applications across multiple industry such as Banking, Capital Market, NBFC, IT/ITES, Cybersecurity, Automobile, Insurance, Pharmaceutical, FMCG, Real Estate, Hospitality, Manufacturing and Other conglomerates etc. Its diversification of revenue across multiple industry verticals allows it to prevent any possible industry concentration in any of its product categories.

Long standing relationships with various Cybersecurity OEM Developers: The company has entered into agreements as authorized resellers with a various OEMs for distribution of cybersecurity products along with its licenses and subscriptions etc. These OEMs develop solutions to ensure secure access, defence for web applications, Network security, End point security, cloud workload protection, high performance event streaming and integration ensuring real time visibility, in-memory data structure solutions etc. Its established relationship with these OEMs has enabled it to develop a holistic product portfolio addressing diverse cyber security solutions across various industries. Its agreements with its technology partners heighten its ability to provide products and services catering to specific customer requirements.

Risks and concerns

Significant revenue comes from single client: The company derives a significant portion of its revenue from operations from a few customers, with its single largest customer contributing more than 50%, of its revenue from operations during the last three financial years. The company has garnered 62.76%, 58.51% and 63.50% of its total revenue from single customer in FY25, FY24 and FY23 respectively. Its reliance on a single or limited number of customers for its business exposes it to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from its key customers, a failure to negotiate favorable terms with its key customers or the loss of these customers, all of which would have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the company.

Heavily reliant on few OEM vendors/suppliers for purchase of software licenses: The company’s business model entails the purchase of significant quantities of cybersecurity products. It is heavily reliant on few OEM vendors/suppliers for purchase of software licenses in order to cater the needs of its customers and provide its cybersecurity solutions to various industries. Its single largest supplier contributing to more than 50% of its purchases during the last three financial years. Moreover, it has not entered into long-term contracts or arrangements with these OEM vendors. Any loss of such vendors/suppliers may disrupt its operations and will have a material adverse impact on its business and its revenue.

Intense competition in the market for cybersecurity product: The company operates in a competitive industry that experiences rapid technological developments, and changes in customer requirements. Its competitors include the big Global System Integrators, mid-sized, and several smaller local competitors in the various geographic markets in which it operates. It may face competition from companies that grow in size or scope as the result of strategic mergers or acquisitions, which may result in larger competitors with significant resources that benefit from economies of scale and scope. Such events could have a variety of negative effects on its competitive position and its financial results, including reducing its revenue, increasing its costs, and lowering its gross margin percentage. If its competitors develop and implement methodologies that yield greater efficiency and productivity, they may be able to issue services similar to it at lower prices without adversely affecting their profit margins.

Outlook

Meta Infotech is engaged in the business of cybersecurity solutions for various industries, including banking, IT, and manufacturing. The company offers services such as consulting, implementation, and sustenance, focusing on protecting and maintaining the integrity of information and systems. It is One Stop Shop for safeguarding the digital assets and infrastructure. On the concern side, the company derives a significant portion of its revenue from operations from a few customers, with its single largest customer contributing more than 50%, of its revenue from operations during the last three financial years. Loss of any of these customers or a reduction in business with any of them could adversely affect its business, results of operations and financial condition. Moreover, it is dependent on few Industries for majority of its revenue from operations with banking industry contributing to more than 50% of its revenue from operations during the last three financial years. Downtrend or change in regulatory framework in these Industries may result in an adverse effect on its business, revenue from operations and financial conditions.

The company is coming out with a maiden IPO of 49,80,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 153-161 per equity share. The aggregate size of the offer is around Rs 76.19 crore to Rs 80.18 crore based on lower and upper price band respectively. On performance front, the net revenue from operations of the company increased significantly by 43.84%, rising from Rs 15,213.32 lakh in FY 2023-24 to Rs 21,882.35 lakh in FY 2024-25. Moreover, net profit after tax for the financial year 2024-25 increased to Rs 1,450.14 lakh as compared to profit of Rs 1050.78 lakh in the financial year 2023-24. The increase of 38.01% was due to factors increase in PAT margin.

The company consistently focus to increase its technological capabilities and expand its domain expertise. Most recently, it has added 2 new capabilities including 1) Micro segmentation and 2) Patch management. 1) Micro segmentation: enhances cybersecurity defense by dividing the network into smaller, isolated segments. This granular approach limits the movement of potential threats within the network, thereby containing breaches and reducing the impact of security incidents. 2) Patch management: Ensures that all applications, operating systems, middleware and network devices are consistently patched against known vulnerabilities, mitigating risks associated with security breaches and system failures. Going forward, it intends to continue growing its existing technological capabilities and expanding its domain expertise by identifying vulnerable sectors with growth potential to add value to its portfolio of offerings and help it gaining credibility in the market and expand its business verticals.