SRIT India IPO: Financial Review of company

SRIT India is launching its initial public offering between September 28 and 30, aiming to raise 218 crore at a valuation of 835 crore. The company provides IT services and software solutions primarily to government offices. Currently, it holds an order book of approximately 1,200 crore, which is 150% of its total valuation. While the company displays improving EBITDA margins and a P/E ratio of approximately 19, there are notable concerns. Management has not disclosed the intended use for 40% of the IPO proceeds, a red flag for operational transparency. Furthermore, despite revenue growth, the company has struggled with operational efficiency, failing to convert its significant order backlog into proportional bottom-line growth. While valuation appears reasonable at par, the P/B ratio of 2 indicates that the stock is not deeply undervalued compared to peers. I am positive regarding potential listing gains and short-term performance. However, long-term viability remains uncertain until execution consistency improves. Investors should exercise caution regarding the undisclosed capital allocation.