Companies

Investors have rewarded our GOPGC model, says LatentView Analytics CEO

NARAYANAN V Chennai | Updated on November 23, 2021

‘The market opportunity is phenomenal, and there is a huge headroom for growth’

Rajan Sethuraman, CEO of Chennai-based LatentView Analytics, could not have asked for a better IPO. After the offering was oversubscribed 326 times, it made a stellar debut in the bourses on Tuesday, listing at ₹530 apiece on the BSE, a premium of 169 per cent over its offer price of ₹197 per share. Speaking to BusinessLine, he shared his views on the company’s IPO, plans to fulfill investor aspirations, expansion plans, and growth potential of the data analytics sector. Edited:

Did you anticipate this kind of response for your IPO?

We knew we had a sound business story in terms of profitability, growth over the 15 years of our existence, retained earnings within the business, as well as type and quality of work that we are doing by serving marquee clients. So, we were expecting a fairly solid positive response, but the magnitude of the response has been overwhelming and even beyond what we have anticipated.

What factors contributed

to this success?

I think this is just a reaffirmation of fundamentals. Traditionally, companies that have been profitable, grown well and generated free cash flows, were the ones that attracted investors’ attention and interest. In recent times, several of these notions have been questioned or alternative models have emerged on how companies are valued, especially in relation to new-age, internet-based business or network effect-based businesses. Ours is a traditional model, which we call GOPGC – good, old-fashioned, profitable growth company – and the success is a reaffirmation of faith in such businesses.

Do you think investors have also looked at the growth potential of data analytics? You are the first player to be listed in this space..

Absolutely. We also see the increasing maturity of the investing audience in terms of appreciation of technology, new-age approaches and concepts. Data and analytics, in some sense, are relatively new in comparison to other technologies that we find under the digital umbrella. People used to talk about SMACK (Social, mobile, Analytics and Cloud). I think analytics is coming of age, and we are seeing that happening increasingly right on back of the pandemic, as more and more businesses have gone digital, either in entirety or partially. There is a plethora of data and information available and in some sense, we are at an inflection point where all of this data can be put to good use and better understanding. So, the potential is huge and that is what the investor audience is appreciating.

How do you plan to fulfill investor aspirations?

The market opportunity is phenomenal, and there is a huge headroom for growth. We have set apart IPO proceeds for three distinct purposes, working capital requirements in the US and Europe, strengthening the capitalisation of our European subsidiaries, and a big chunk of proceeds has also been set apart for inorganic growth and acquisition. In that area, we are also evaluating some opportunities that have come our way. We are already reshaping our business, value proposition and ideas that we are executing and in terms of additions that we are making to our front-end sales, marketing, business development, as well as expertise and capability development.

You are presently focussed on single geography (US) and single sector (technology). How do you plan to de-risk?

Almost 93 per cent of our revenues and business comes from the US. We have subsidiaries in the UK, Germany and the Netherlands. These three geographies account for 70 out of the Fortune 500 companies, and we will definitely look to accelerate our growth in the European market itself so that it becomes a significant contributor in terms of revenue, say at about 15 per cent, over the next 2-3 years.

From an industry stand point, technology is our mainstay. Today, all the top five tech companies in the world are our clients, and we do very interesting work with them.

But we see a lot of actions in the more traditional sectors as well like manufacturing, automotive, consumer products, retail or BFSI. Today, two-thirds of our business comes from technology, and I would expect that will be probably move down to 50 per cent in next 2-3 years with the other sectors picking up steam.

Published on November 23, 2021

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