Dove Soft IPO (30 Sep-05 Oct) Analysis

Sep 30

7 min read

Updated: Oct 4

SME IPO Analysis | BSE SME Platform | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 229(2) and 253(1)

Based on Red Herring Prospectus dated September 22, 2026 | CPaaS Communications: SMS, RCS, Voice, WhatsApp and Email | Mumbai, Maharashtra

Dove Soft Limited was incorporated as Dove Soft Private Limited on August 19, 2011, and converted to a public company in September 2022. The registered office is Office No. 1101, DLH Park, Opposite MTNL, Goregaon West, Mumbai 400062, Maharashtra. The website is www.dovesoft.io. The promoters are Kurjibhai Rupareliya, Rahul Bhanushali and Sky Occean Infrastructure Limited. Archit Tundia is Company Secretary and Compliance Officer.

The company is an integrated provider of cloud communications solutions, commonly known as a CPaaS (Communications Platform as a Service) provider, offering SMS, RCS, Voice, WhatsApp, Email and other digital messaging and engagement services to enterprises and over the top platforms.

The company acts as an aggregator between telecom operators and clients, serving industries including telecom, IT, travel, entertainment, media, retail, real estate, healthcare, BFSI, automobile, e commerce and food and beverages.

The company has two subsidiaries: Dove Soft Technologies Private Limited, incorporated in 2021, which contributed 18.24% of FY2026 consolidated revenue, and Dove Soft Global FZCO, a Dubai based free zone company incorporated in April 2025 providing SMS and IT network services, which contributed 4.33% of FY2026 revenue.

Annual recurring revenue grew from Rs.7,725.38 Lakhs in FY2024 to Rs.15,662.68 Lakhs in FY2026, while customer churn improved from 29.16% to 19.44% over the same period. The financial year ends March 31.

Key Basics

This is an SME book built issue on the BSE SME platform, made under Regulation 229(2) and 253(1) of the SEBI ICDR Regulations. The RHP is dated September 22, 2026. The Price Band, lot size and Bid dates remain undetermined at this stage.

Field	Value
Document Type	Red Herring Prospectus dated September 22, 2026. Price Band, lot size and Bid dates are [TBD].
Platform	BSE SME. Designated Stock Exchange: BSE.
Issue Structure	Fresh Issue of up to 53,28,000 Equity Shares plus an Offer for Sale of up to 12,72,000 Equity Shares by two selling shareholders. Total Offer up to 66,00,000 shares.
Face Value	Rs.10 per Equity Share
Selling Shareholder WACA	Rs.8.07 per Equity Share for Rahul Bhanushali; Rs.4.94 per Equity Share for Sky Occean Infrastructure Limited, as certified by the statutory auditor
BRLM	Not identified in the extracted document
Registrar	Not identified in the extracted document
Bid Dates	[TBD]

What distinguishes this issue is an ongoing income tax dispute alleging the company was a beneficiary of accommodation entries, a serious category of allegation involving suspected not genuine transactions, alongside a group company's own separate and unresolved tax appeal. This is a Fresh Issue plus an Offer for Sale by two promoter selling shareholders.

How Will the IPO Money Be Used?

This is a Fresh Issue plus an Offer for Sale. The company receives no proceeds from the Offer for Sale; those proceeds go to the two selling shareholders.

Object	Amount (Rs. Lakhs)	Details
Working capital	4,600.00	Against a total estimated working capital requirement of Rs.20,012.58 Lakhs, of which Rs.15,412.58 Lakhs is to be funded from internal accruals and borrowing, with the balance from Net Proceeds, deployed Rs.2,200.00 Lakhs in FY2027 and Rs.2,400.00 Lakhs in FY2028.
General corporate purposes	[TBD]	Capped at 15% of Gross Proceeds or Rs.1,000.00 Lakhs, whichever is lower.
Total Net Proceeds	[TBD]	To be finalised once the Offer Price is set.

This is the simplest use of proceeds in this batch: a single quantified object, working capital, with no capital expenditure or debt repayment line. The working capital funding is intended to support a transition toward direct procurement from telecom operators, which the company states requires bank guarantees and shorter, structurally embedded credit periods of 30 to 60 days, replacing the higher bulk purchase costs it currently incurs without such guarantees.

Financial Performance

Revenue, EBITDA, and Profitability

Consolidated (Rs. Lakhs)	FY2026	FY2025	FY2024
Revenue from Operations	27,398.01	18,773.86	11,972.69
EBITDA	3,277.88	2,413.42	1,477.14
EBITDA Margin	11.96%	12.86%	12.34%
Profit After Tax	2,340.42	1,654.00	1,027.18
PAT Margin	8.54%	8.81%	8.58%
EPS, Basic (Rs.)	12.01	8.82	5.60
Return on Equity	29.79%	33.12%	36.71%
Return on Capital Employed	36.50%	42.45%	45.48%

Revenue grew 45.94% in FY2026 to Rs.27,398.01 Lakhs, following growth of 56.79% in FY2025, and PAT grew 41.48% in FY2026 to Rs.2,340.42 Lakhs. EBITDA margin and PAT margin have stayed in a narrow band across all three years, roughly 12% and 8.5% respectively.

RoE and RoCE have both eased every year despite growing absolute profit, from 36.71% and 45.48% in FY2024 to 29.79% and 36.50% in FY2026, as the equity base expanded following a Rs.1,707.73 Lakhs share issuance during FY2025.

Balance Sheet and Cash Flow

Consolidated (Rs. Lakhs)	FY2026	FY2025	FY2024
Total Assets	16,440.04	10,898.58	8,556.20
Total Equity (excluding minority interest)	8,923.46	6,609.46	3,286.04
Trade Receivables	13,764.47	8,681.09	6,826.79
Debt to Equity	0.10x	0.13x	0.10x
Net Cash from Operating Activities	430.48	(1,747.90)	34.74
NAV per Share (Rs.)	47.43	35.02	18.34

Operating cash flow has been highly volatile: a small positive Rs.34.74 Lakhs in FY2024, a sharply negative Rs.1,747.90 Lakhs in FY2025 as trade receivables jumped Rs.1,854.30 Lakhs that year, then recovering to a positive Rs.430.48 Lakhs in FY2026.

Trade receivables have grown every year, from Rs.6,826.79 Lakhs in FY2024 to Rs.13,764.47 Lakhs in FY2026, now roughly half of total assets. Debt to Equity has stayed very low throughout, never exceeding 0.13x, and NAV per share nearly tripled from Rs.18.34 to Rs.47.43 over the three years shown.

How Does It Compare to Peers?

The RHP names two listed peers: Route Mobile Limited and Tanla Platforms Limited, based on closing BSE prices as of September 4, 2026. Dove Soft's own P/E cannot be shown until the Offer Price is set.

Company	EPS (Rs.)	P/E (x)	NAV (Rs.)	RoNW (%)
Dove Soft Limited	12.01	[TBD]	47.43	29.79%
Route Mobile Limited	37.94	13.21	447.85	9.72%
Tanla Platforms Limited	38.36	13.58	187.61	20.46%

Dove Soft's RoNW of 29.79% is well ahead of both named peers, though both peers are vastly larger, with revenue from operations of Rs.4,40,821.00 Lakhs and Rs.4,41,770.64 Lakhs respectively against Dove Soft's Rs.27,398.01 Lakhs, roughly 16 times the scale. NAV per share for both peers is also far higher, reflecting their much larger established capital base in the same CPaaS industry.

Key Risks

• The Income Tax Department has alleged the company was a beneficiary of accommodation entries totalling Rs.100.00 Lakhs, treated Rs.100.00 Lakhs as unexplained cash credit and Rs.2.00 Lakhs as unexplained expenditure under Section 68, raised a demand of Rs.125.57 Lakhs, and initiated penalty proceedings under Section 271AAC(1); the company has appealed and the matter is pending adjudication with no hearing date yet assigned.

• A group company, E Trav Tech Limited, faces a separate Rs.207.00 Lakhs income tax demand for Assessment Year 2020 to 21 related to unsecured loans, and its first appeal was dismissed; a further appeal is pending.

• Operating cash flow has been highly volatile, swinging from a small positive in FY2024 to Rs.1,747.90 Lakhs used in FY2025 back to a positive Rs.430.48 Lakhs in FY2026, driven by large year to year movements in trade receivables, which have grown every year and now represent roughly half of total assets.

• The company currently does not provide financial guarantees to telecom operators, resulting in higher bulk purchase costs and shorter credit periods; the Issue's working capital object is specifically aimed at transitioning toward direct telecom operator procurement, which itself requires bank guarantees and comes with structurally embedded 30 to 60 day credit cycles rather than eliminating the underlying constraint.

• Both RoE and RoCE have declined every year shown despite growing absolute profit, from 36.71% and 45.48% in FY2024 to 29.79% and 36.50% in FY2026.

• Both named listed peers are roughly 16 times larger by revenue, so the RoNW comparison should be read alongside this scale gap rather than as a like for like valuation signal.

• The company operates as an aggregator between telecom operators and clients in a messaging and communications market subject to regulatory change, including evolving rules on unsolicited commercial communication and data privacy.

• The Dubai based subsidiary, Dove Soft Global FZCO, was only incorporated in April 2025, giving it a very short operating history within the group's consolidated results.

• This report could not identify the Book Running Lead Manager or Registrar from the extracted text; investors should confirm these directly from the final RHP.

• The company's own risk disclosure names multiple related party salary, service fee, professional fee, rent and loan transactions with promoters and their family members across all three years shown.

• Customer churn, while improving, remained at 19.44% in FY2026, meaning roughly one in five customers did not continue with the platform even in the most recent year.

Positives to Note

• Revenue grew from Rs.11,972.69 Lakhs in FY2024 to Rs.27,398.01 Lakhs in FY2026, and PAT grew from Rs.1,027.18 Lakhs to Rs.2,340.42 Lakhs over the same period.

• Customer churn improved every year shown, from 29.16% in FY2024 to 19.44% in FY2026, alongside annual recurring revenue growing from Rs.7,725.38 Lakhs to Rs.15,662.68 Lakhs.

• Debt to Equity has stayed very low throughout, never exceeding 0.13x across all three years shown.

• RoNW of 29.79% in FY2026 is well ahead of both named listed peers, neither of which exceeds 21%.

• The company has diversified its service portfolio across SMS, RCS, Voice, WhatsApp and Email channels and across multiple end industries, reducing dependence on any single communication channel or customer sector.

• The company has established two subsidiaries, including an international presence in Dubai, giving it a platform for geographic diversification beyond the Indian market.

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