Why didn’t they opt for a VC , and why go for IPO ?
Lets say you own Affle. You want to raise money. VC or PE offers you Rs100 for the stake you are selling. You realize you can raise Rs110, 120, 130 or 140 in an IPO. Would you raise money at the highest valuation or sell to VC who understands technology better?
Co has Computers of only 50 lakh as on March 2019 (IPO Date) (30 Lakhs Net Block). Are the balance leased. ?
Company gross block of computers is Rs158.6 lakhs end FY20 and Rs90.6 FY19 which will be the cost of buying the computers. The net block post depreciation (If I am not wrong they are depreciated in 3 years) value is Rs75.2 lakhs end FY20 and 53.4 lakhs end FY19.
Total number of employees end FY20 is 295. Rs158.6 lakh/ 295 is Rs53,762 per computer which is a very decent price per computer.
Please note the cost of computer software (amortised over 5 years) is seperate at Rs251.2 lakhs end of FY20 in intangible assets. Also note there is software application devlopment in Rs2525.6 lakhs which 10x of computer software.
Bulk of Cost is Inventory/Data costs - Normally in IT cos, employee cost is 50%+
Employee cost in FY20 is Rs2729.3 lakhs. Number of employees 295. Per employee cost is Rs9.25 lakhs. Dont see anything fishy in that.
Affle is not an IT company. It is involved in mobile adverstising. You need ad inventory to do business at it is the single biggest cost.
If I get answers or insights on some of your other questions I will get back with more.
Disclosure: Invested, but always ready to hear positives or negatives to retest investment thesis.