SRIT India IPO DHRP Analysis

IPO Analysis  |  NSE and BSE Main Board  |  100% Book Built Fresh Issue  |  Regulation 6(1)

Based on Draft Red Herring Prospectus dated January 29, 2026  |  IT/ITeS Digital Solutions for Government and Enterprises  |  Bengaluru, Karnataka

STATUS: DRHP FILED  |  Fresh Issue: up to 1,68,00,000 Shares  |  No OFS  |  Regulation 6(1)  |  NSE and BSE Main Board  |  Pre-SEBI Observation Stage  |  26 Years Operating Track Record  |  Order Book: Rs.1,280.62 Crore

 SRIT India Limited (formerly SRIT India Private Limited) is a Bengaluru-headquartered Information Technology and Information Technology enabled Services (IT/ITeS) solutions company with a 26-year operating track record in the design, implementation, and operation of digital platforms for Government entities and Enterprises in India and select overseas markets.

Its registered and corporate office is at SRIT House, #113/1B, ITPL Main Road, Kundalahalli, Bengaluru 560037, Karnataka. Its website is www.sritindia.com. Its CIN is U72200KA1999PLC025692. The three promoters are Dr. Nambiar Raghavan Madhusoodan (Managing Director and Chairman), Prasaktha Vakkiyl Nambiar, and Martin Poovakkulam Chacko (Whole-time Director). The company was incorporated in 1999 and has been delivering technology solutions, predominantly to government sector clients, since that year.

Three business verticals:

(i) Electronic Governance (77.94% of H1 FY2026 revenue): digital solutions for state and central government entities including systems integration, e-governance platforms, traffic enforcement and transport management, state beverage corporation ERP, banking connectivity infrastructure and forensic laboratory integration;

(ii) Telecommunications and Broadband (14.50% of H1 FY2026 revenue): state-wide fibre optic network deployment and operations, last-mile connectivity including GPON devices, network management systems and broadband infrastructure;

(iii) Healthcare (7.56% of H1 FY2026 revenue): hospital information management systems, supply chain and procurement systems, e-prescription and online licensing for state health departments, and national health insurance platforms (including an ongoing international project in Qatar for a National Health Insurance System).

Engagement model: SRIT operates on a project basis, delivering both proprietary product implementations and bespoke system integration services. Projects span the full lifecycle including design, deployment, operations, maintenance, and managed services.

The company delivers a mix of milestone-billed projects (revenue recognised on percentage completion of milestones) and recurring revenue contracts such as Annual Maintenance Contracts (AMC) and Operations and Maintenance (O&M) service agreements. As of September 30, 2025, 78 out of 116 average active orders (67.24%) were recurring in nature, providing meaningful revenue predictability.

Project scale and track record: in the last decade, SRIT has executed more than 103 projects with a total order value of Rs.1,234.72 Crore across its three verticals. Notable deployments include a fully automated traffic enforcement and AI-based transport management system across 14 districts (project cost Rs.151.23 Crore), a state-owned beverage corporation ERP (Rs.256.94 Crore), an ESIC pan-India health management system covering approximately 2,200 hospitals and dispensaries (Rs.83.54 Crore), state-wide fibre optic network deployment (Rs.555.78 Crore), and bank ATM connectivity migration for approximately 15,000 ATMs across India (Rs.250.82 Crore).

The company's delivery processes are appraised at CMMI Level 5 (the highest maturity level) and are certified to ISO 27034-1:2011, ISO/IEC 27001:2022, and ISO 45001:2018. Statutory auditors are Brahmayya and Co., Chartered Accountants (Firm Registration No. 000515S). The company's financial year ends March 31.

Key Basics

This is a 100% Fresh Issue with no Offer for Sale component. The DRHP is dated January 29, 2026 and is at the pre-SEBI observation stage. The Issue is made under Regulation 6(1) of SEBI ICDR Regulations, the standard main board profitability-based eligibility route, listing on both NSE and BSE. All items including Price Band, bid dates, and final issue size remain undetermined.

Document Type	Draft Red Herring Prospectus (DRHP) dated January 29, 2026. Pre-SEBI observation stage. All items to be finalised at RHP stage.
Issue Type	100% Book Built Fresh Issue of up to 1,68,00,000 Equity Shares of face value Rs.5 each. No OFS. Company receives all net proceeds after issue expenses.
Face Value	Rs.5 per Equity Share
Promoters	Dr. Nambiar Raghavan Madhusoodan (Managing Director and Chairman), Prasaktha Vakkiyl Nambiar, and Martin Poovakkulam Chacko (Whole-time Director).
Eligibility	Regulation 6(1) of SEBI ICDR Regulations, the standard main board profitability-based eligibility route.
Listing Exchanges	NSE and BSE. Designated Stock Exchange TBD. In-principle approvals pending.
BRLM	Choice Capital Advisors Private Limited. Contact: Nimisha Joshi / Anuj Killa. Email: sil.ipo@choiceindia.com
Registrar	KFin Technologies Limited. Contact: M Murali Krishna. Email: compliance.corp@kfintech.com
Bid/Issue Dates	All dates to be announced after SEBI observations and RHP filing.
Listed Peers	Mastek Limited and Railtel Corporation of India Limited (two named listed peers, explicitly noted as not strictly comparable given differences in nature and size).
Order Book (Sep 30, 2025)	Rs.12,806.21 million (Rs.1,280.62 Crore), representing approximately 3.29x FY2025 annual revenue. Electronic governance at 72.12%, healthcare at 13.33%, telecom and broadband at 14.55%.

 This is a 100% Fresh Issue. The Net Proceeds are deployed across three identified objects. Working capital is the dominant allocation. The acquisition/general corporate purposes object is subject to a 35% gross proceeds cap, with specific sub-limits for acquisitions (25% cap) and GCP (25% cap separately). Importantly, the targets for inorganic acquisition have not been identified, making that component speculative at this stage.

Object	Amount (Rs. Mn)	Details
Funding Working Capital Requirements	1,240.00	Incremental working capital to support the large and growing order book (Rs.1,280.62 Crore as of September 30, 2025). Given the project-based nature of the business with milestone billing, the company carries significant trade receivables (Rs.547.58 million as of September 2025 versus Rs.543.78 million at FY2025 year-end). Planned deployment: Rs.806 million in FY2027 and Rs.434 million in FY2028.
Capital Expenditure: Modernisation of Existing Products and Redevelopment	153.57	Investment in technology infrastructure upgrades, product platform modernisation, and capability development. The company's CMMI Level 5 environment requires ongoing technology investment to maintain competitive positioning. All deployment planned in FY2027.
Inorganic Growth through Unidentified Acquisitions and Strategic Initiatives, plus General Corporate Purposes	[TBD]	Capped at 35% of Gross Proceeds in aggregate. Acquisition-specific sub-limit: 25% of Gross Proceeds. GCP sub-limit: 25% of Gross Proceeds. Acquisition targets have not been identified as of the DRHP date. This means a potentially significant portion of IPO proceeds will be deployed at management discretion post-listing.
TOTAL FRESH ISSUE		100% Fresh Issue. No OFS. Total quantum depends on Issue Price. Identified specific objects: Rs.1,393.57 million. The acquisition/GCP component (up to 35% of gross proceeds) is discretionary and unidentified. None of the Objects have been appraised by any bank or financial institution.

The use of proceeds reflects SRIT's operating reality as a government-focused IT services company: working capital requirements are large relative to revenues because government project billing cycles are long, advance payments need to be deployed, and project delivery precedes final settlement.

The Rs.1,240 million working capital allocation is operationally justified. The Rs.153.57 million capex for product modernisation is modest but strategically important for maintaining the technology competitiveness of SRIT's proprietary healthcare, e-governance, and connectivity product suite.

Financial Performance

Note: All figures in Rs. million unless stated; Rs. Crore equivalents provided for key lines. Financial periods: Six months ended September 30, 2025 (H1 FY2026, stub); Fiscal 2025 (year ended March 31, 2025); Fiscal 2024 (year ended March 31, 2024); Fiscal 2023 (year ended March 31, 2023). Restated Consolidated Financial Information under Ind AS, audited by Brahmayya and Co. (FRN 000515S). The financial trajectory demonstrates consistent and meaningful revenue and profitability growth, with revenue growing at a CAGR of 36.87% from FY2023 to FY2025 and PAT at 30.73% over the same period.

Revenue, EBITDA, and Profitability

Metric	H1 FY26 (Rs. Mn)	FY2025 (Rs. Mn)	FY2024 (Rs. Mn)	FY2023 (Rs. Mn)
Revenue from Operations	2,326.18	3,893.47	2,710.88	1,518.46
Revenue (Rs. Crore)	Rs.232.6 Cr	Rs.389.3 Cr	Rs.271.1 Cr	Rs.151.8 Cr
Revenue Growth % YoY	N/A (H1 stub)	+43.62%	+78.53%	N/A
Revenue CAGR (FY2023 to FY2025)	36.87%
Revenue by Vertical (H1 FY26)	E-governance: 77.94% | Telecom: 14.50% | Healthcare: 7.56%
Other Income	48.99	111.55	111.33	110.82
Total Income	2,375.17	4,005.02	2,822.21	1,629.28
Sub-contracting and Technical Fees	1,703.83	2,865.20	1,839.48	926.40
Sub-contracting as % of Revenue	73.24%	73.59%	67.85%	61.01%
Employee Benefits Expense	182.02	351.47	280.47	222.92
Finance Costs	57.05	120.29	120.00	103.09
Depreciation and Amortisation	36.87	27.44	17.81	16.62
Other Expenses	119.59	178.71	181.08	144.09
Total Expenses	2,099.36	3,543.11	2,438.84	1,413.12
Profit Before Tax	275.81	461.91	383.37	216.16
Tax Expense (Net)	76.57	125.87	92.61	65.75
Profit After Tax (PAT)	199.24	336.04	290.76	150.41
PAT CAGR (FY2023 to FY2025)	30.73%
EBITDA (PBT + Finance Costs + D&A less Other Income)	320.74	498.09	409.85	225.05
EBITDA Margin %	13.79%	12.79%	15.12%	14.82%
PAT Margin %	8.57%	8.63%	10.73%	9.91%
Return on Equity (RoE) %	16.04%	38.76%	44.11%	24.61%
Return on Capital Employed (ROCE) %	16.42%	37.42%	47.52%	45.94%
Debt to Equity Ratio (times)	0.29x	0.66x	0.31x	0.34x
Basic and Diluted EPS (Rs.)	4.52	7.20	5.39	2.78
Weighted Average EPS (Rs.)	5.85 (3-yr weighted)
Net Worth	1,561.84	931.65	804.70	512.98
NAV per Share (Rs.)	33.93	23.02	14.93	9.52

Note: EBITDA calculated as Revenue from Operations minus Total Expenses plus Finance Costs plus Depreciation (i.e., excluding Other Income). Per the DRHP's own definition: EBITDA = PBT plus Finance Costs plus Depreciation less Other Income.

SRIT's revenue grew at 36.87% CAGR over the FY2023 to FY2025 period, with the acceleration from 78.53% growth in FY2024 significantly driven by the large electronic governance project pipeline maturing into revenue recognition. The FY2025 PAT of Rs.336.04 million represents the highest absolute profitability in the company's recent history. EBITDA margins have been relatively stable in the 13 to 15% range across all four periods, reflecting the consistent cost structure of a project-delivery business.

The most important structural observation in this P&L is the high and rising sub-contracting cost: at 73.24% of revenue in H1 FY2026 (versus 61.01% in FY2023), SRIT is increasingly deploying third-party technical resources for project delivery.

This is common in government IT projects where specific domain skills and manpower must be sourced externally, but it creates margin sensitivity to sub-contractor pricing and availability. Employee costs (Rs.182.02 million in H1 FY2026, approximately 7.8% of revenue) are relatively lean, consistent with a company that delivers through a partner and sub-contractor model rather than a large in-house workforce.

The RoE and ROCE metrics show a significant decline in H1 FY2026 (16.04% and 16.42%) versus FY2025 (38.76% and 37.42%). This decline is primarily because the equity base nearly doubled between FY2025 (Rs.931.65 million) and H1 FY2026 (Rs.1,561.84 million) due to fresh equity issuances, while H1 PAT of Rs.199.24 million annualises to approximately Rs.399 million, broadly consistent with FY2025. The equity expansion from pre-IPO private placements is the direct cause of the RoE compression, not any operational deterioration.

Balance Sheet and Cash Flow

Item	Sep 2025 (Rs. Mn)	FY2025 (Rs. Mn)	FY2024 (Rs. Mn)	FY2023 (Rs. Mn)
Equity Share Capital	230.16	202.35	269.47	269.47
Net Worth (excl. NCI)	1,561.84	931.65	804.70	512.98
Total Assets	3,340.54	2,930.61	2,286.86	1,847.33
Total Borrowings (incl. lease liabilities)	460.26	618.36	248.33	175.96
Trade Receivables	547.58	543.78	376.88	291.00
Other Financial Assets (unbilled revenue etc.)	Large
Cash and Cash Equivalents	75.81	153.56	241.44	33.05
Net Cash from Operating Activities (Rs. Mn)	(175.17)	(589.43)	50.91	108.57
Net Cash from Investing Activities (Rs. Mn)	(141.16)	(273.79)	(152.22)	(84.68)
Net Cash from Financing Activities (Rs. Mn)	238.49	2.89	20.67	(10.80)

The most notable balance sheet observation is the consistently negative or near-zero operating cash flow despite growing PAT. Operating cash flow was negative Rs.589.43 million (FY2025) and negative Rs.175.17 million (H1 FY2026), contrasting with positive PAT of Rs.336.04 million and Rs.199.24 million in the same periods.

This divergence reflects the structural working capital absorption of a government IT project company: large amounts of revenue are earned but not yet billed (unbilled receivables), or billed but not yet collected (trade receivables). Cash and cash equivalents have declined from Rs.241.44 million (FY2024) to Rs.75.81 million (September 2025) even as profitability has grown, as working capital consumption absorbs all operating earnings and then some. The Rs.1,240 million working capital IPO allocation directly addresses this structural cash gap.

How Does It Compare to Peers?

The DRHP names two listed industry peers: Mastek Limited (enterprise IT solutions with significant international operations) and Railtel Corporation of India Limited (government-focused telecom and IT infrastructure company). Both are explicitly noted as not strictly comparable to SRIT given differences in nature and size. All figures in Rs. million.

Metric (FY2025)	SRIT India	Mastek Ltd	Railtel Corp	Notes
Revenue from Ops (Rs. Mn)	3,893.47	34,552.30	34,775.00	Peers ~9x larger
EBITDA (Rs. Mn)	498.09	5,540.60	5,117.50
EBITDA Margin %	12.79%	16.04%	14.72%
PAT (Rs. Mn)	336.04	3,759.30	2,998.10
PAT Margin %	8.63%	10.88%	8.62%
RoE %	38.76%	16.53%	15.67%	SRIT leads
ROCE %	37.42%	16.46%	19.81%	SRIT leads
Net Worth (Rs. Mn)	931.65	24,623.40	19,996.20
Debt/Equity (times)	0.66x	0.24x	0.02x	Peers more conservative
P/E Ratio	TBD

SRIT's RoE of 38.76% (FY2025) and ROCE of 37.42% are the highest of the three companies by a significant margin, with Mastek at 16.53% RoE and Railtel at 15.67% RoE. However, the peers are approximately nine times larger by revenue and have substantially stronger balance sheets (both with very low or negligible debt). SRIT's EBITDA margin of 12.79% is broadly competitive with Railtel (14.72%) but below Mastek (16.04%).

The high RoE at this stage reflects SRIT's smaller equity base (which will expand post-IPO) rather than an inherently more efficient business model. Post-IPO, with the equity base expanding from the fresh issue proceeds, the RoE and ROCE will naturally moderate toward peer levels.

Key Risks

l  Operating cash flow negative in two of four periods including both FY2025 (negative Rs.589.43 million) and H1 FY2026 (negative Rs.175.17 million) despite strong PAT: this persistent pattern of profitable but cash-consuming operations reflects the structural working capital absorption of government IT project delivery. The company earns revenue that is slow to convert to cash due to long billing cycles, milestone-based revenue recognition, and extended government payment timelines. Cash balances fell from Rs.241.44 million (FY2024) to Rs.75.81 million (September 2025) even as profitability grew.

l  Up to 35% of Gross Proceeds (split between acquisitions and GCP) is allocated to unidentified targets with significant management discretion: the DRHP explicitly states that acquisition targets have not been identified. This means a potentially significant portion of IPO proceeds will be deployed at management discretion post-listing. The sub-limit for acquisitions alone is 25% of Gross Proceeds. Investors are effectively providing capital for a strategy that has no identified targets, valuations, or business rationale beyond the general intent of inorganic growth.

l  Heavy and rising sub-contracting costs: at 73.24% of revenue in H1 FY2026 (up from 61.01% in FY2023), sub-contracting is by far the largest cost item and is structurally rising: the company relies substantially on third-party resources for project delivery. While this is common in government IT, the risk is that margin compression from sub-contractor price increases, scarcity of skilled resources, or unfavourable terms renegotiations could directly erode EBITDA margins without the company having direct control over this cost line.

l  Heavy customer concentration in government sector with no disclosed long-term revenue assurance: virtually all revenue comes from government and quasi-government entities, creating dependence on government budget cycles, procurement timelines, and policy priorities. The DRHP does not disclose specific customer concentration percentages, but given the project-based revenue model with a limited number of large government clients, the risk of revenue disruption from a single delayed or cancelled project is significant.

l  RoE and ROCE declined sharply in H1 FY2026 (to 16.04% and 16.42% respectively from 38.76% and 37.42% in FY2025): while explained partly by equity base expansion from pre-IPO private placements, investors should note that capital employed has grown substantially and the company's return ratios are normalising toward peer levels. Post-IPO, with further equity expansion, these ratios will decline further before new capital is deployed productively.

l  EBITDA margins are thin at 12.79% to 15.12% for an IT company serving primarily government clients: compared to technology companies serving enterprise or international clients which typically achieve higher EBITDA margins, SRIT's government-focused model generates more modest margins. Any sub-contractor cost increase or project overrun could compress these margins below 10%.

l  Inorganic growth strategy with unidentified targets creates uncertainty about future capital deployment and integration risk: even if acquisition targets are identified post-IPO, the risks of integration, cultural alignment, and execution in a government IT context are meaningful. Companies in the government IT space often have project-specific relationships that may not transfer cleanly through acquisitions.

l  International revenues (currently limited to the Qatar NHIS project) expose the company to foreign currency risk and international regulatory complexity: the Qatar project represents an important but singular international reference. Expanding internationally in government IT requires country-specific relationships, regulatory approvals, and bidding capabilities that are difficult to build quickly.

l  CMMI Level 5 certification maintenance requires ongoing investment in processes, quality, and compliance infrastructure: while CMMI Level 5 is a genuine differentiator for government procurement, maintaining this certification requires significant ongoing investment in processes and documentation that represents a fixed cost even in periods of lower business activity.

l  Pre-IPO equity issuances at prices potentially below the Issue Price: the DRHP discloses that in the preceding one year, the company has issued Equity Shares at prices that may be below the Issue Price, citing differences in valuation methodology and investor category. This is noted as a risk factor by the company itself and could affect the effective cost basis comparison between pre-IPO and public market investors.

Positives to Note

l  Revenue grew at 36.87% CAGR from FY2023 to FY2025, with consistent PAT growth at 30.73% CAGR over the same period: this is one of the strongest multi-year revenue growth trajectories in this IPO review series, and is backed by real government project wins and order book expansion rather than speculative revenue projections.

l  Order book of Rs.1,280.62 Crore as of September 30, 2025 provides 3.29x forward revenue coverage relative to FY2025 annual revenue: an order book of this scale provides very strong near to medium term revenue visibility. Government IT contracts once awarded are typically executed over multi-year periods with predictable milestone schedules, providing revenue certainty that is unusual compared to commercial enterprise IT contracts.

l  26-year government IT track record with CMMI Level 5 process maturity creates a genuine competitive moat: government procurement in India increasingly requires demonstrated CMMI Level 5 appraisal and specific sector track records. SRIT's 26-year history and successful delivery of large-scale government projects (traffic management, ESIC health systems, state fibre networks, ATM connectivity) is a competitive credential that is difficult for newer entrants to replicate.

l  Regulation 6(1) main board listing on both NSE and BSE confirms multi-year profitable track record: qualifying under the standard main board profitability criteria on two national exchanges reflects genuine and sustained earnings history, providing investor-accessible liquidity from both exchanges from the day of listing.

l  Recurring order component at 67.24% of average active orders (H1 FY2026) provides meaningful revenue predictability: with 78 of 116 active orders being recurring (AMC/O&M type) in nature during H1 FY2026, a significant portion of SRIT's revenue base is predictable and contracted, reducing the lumpiness of purely milestone-billed project revenues.

l  High repeat client ratio: 80.39% of clients in H1 FY2026 were repeat clients from prior periods, indicating strong service quality, relationship continuity, and contract renewal rates in the government IT space where relationship-based procurement is common.

l  International expansion through Qatar NHIS project validates the portability of SRIT's health platform to overseas government markets: the Qatar National Health Insurance System project (approximately Rs.111.74 Crore) demonstrates that SRIT's proprietary healthcare management and revenue cycle platform can be successfully deployed in overseas government health markets, providing a template for future international reference.

Disclaimer

The content on this website is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or a solicitation to buy or sell any security, mutual fund, or financial instrument. Equity Research India is not a SEBI-registered investment advisor or research analyst, and nothing on this site constitutes personalized financial advice.

Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not indicative of future returns. NAV, returns, rankings, and other data may change and may not reflect the most current information at the time of reading.

Readers should conduct their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions. Equity Research India and its authors accept no liability for any loss or damage arising from the use of this content.