Business Overview:

Founded in 1973, R K Swamy Limited is one of the leading integrated marketing services groups in India. It is engaged in the business of integrated marketing communications, customer data analysis, full-service market research and syndicated studies. They are ranked 8th in terms of estimated operating revenue among the integrated marketing communications services groups operating in India with a track record of over five decades.

Some of their notable clients include Aditya Birla Sun Life AMC Limited, Cera Sanitaryware Limited, ICICI Prudential Life Insurance Company Limited, Dr. Reddy’s Laboratories Limited, Havells India Limited, Mahindra and Mahindra Limited, Oil and Natural Gas Corporation Limited, Royal Enfield, Shriram Finance Limited, Tata Play Limited, Ultratech Cement Limited and so on.

Industry overview:

Marketing services refers to a range of activities and strategies that are designed to promote a brand, product, or the business. These services may be provided by in-house marketing teams or outsourced to specialized marketing and advertising agencies.

India has made considerable advancements in the development of digital infrastructure in recent years. The Indian e-commerce industry has witnessed remarkable growth over the past few years. E-commerce has successfully attracted not just consumers, but also global investors. India’s e-commerce market is projected to grow at 18 per cent annually through 2025.

The landscape of advertising has expanded with the advent of new channels that have gained significant popularity in recent years. Indian companies’ marketing spends as a percentage of revenue has remained in the range of 3.1%-3.6% in the past five fiscals.

The marketing services market in India grew at a CAGR of 5.6% between fiscals 2019 and 2023, reaching Rs 1,936 billion in FY23, supported by growth in the marketing spends of Indian corporate companies, rise in revenue of companies, and increase in gross domestic output in the economy.

Financials:

Key Risks:

1. Company’s financial performance and growth are significantly dependent on the sustained profitability and operational success of its Subsidiaries 

2. Out of the 475 clients served in FY23, the top ten clients contributed nearly 42 per cent of its operating revenue

Valuation:

The company has a price-to-earnings ratio of 40.96 while the industry’s price-to-earnings ratio is 69.05.

Objectives of the issue:

The net proceeds of the Fresh Issue are proposed to be utilized in the following manner:

· Funding working capital requirements of the Company and for setting up a digital video content production studio 

· Funding investment in IT infrastructure development of the company, and the Material Subsidiaries, Hansa Research and Hansa Customer Equity; 

· Funding setting up of new customer experience centers ("CEC") and computer aided telephonic interview centers of the company and General corporate purposes.

IPO Details: