INTERVIEW: After a blockbuster listing, Latent View Analytics looks to acquire small data analytics companies focused in Europe and US
- Investors in Latent View Analytics IPO have tripled their money in three days while the stock is still on an upward trend
- After a blockbuster listing on exchanges, the company is looking forward to acquiring an analytics company for about ₹147 crore received from the IPO proceeds, said Rajan Sethuraman, CEO of Latent View Analytics, to Business Insider in an interview.
- The company believes the story of a young but profitable company in the new age digital world of data analytics has played out well in front of investors.
AdvertisementChennai-based data analytics company Latent View Analytics has been the talk of the town after its stellar listing on stock exchanges.
Investors made a profit of over ₹37,000 in three days of listing on an investment of ₹14,972.
Rajan Sethuraman, chief executive officer (CEO) of Latent View Analytics has a good justification to the amazing listing gains. “I think the data analytics story played out. But more importantly, I think the story of a fairly strong profitable company did well. We call this the good old-fashioned, profitable growth company. I feel that investor appreciation of digital technology, new age things, plus appreciation of fundamentals is really explaining,” said Sethuraman.
The 15-year old data analytics company is one of its kind in the listed space. It provides services such as data and analytics consulting, business analytics and insights, advanced predictive analytics, data engineering, and digital solutions.
The company intended to raise ₹600 crore through the initial public offering (IPO) listing, but received bids for ₹1.12 lakh crore.
Next stop — acquiring companies
After the IPO, the company is now focusing on acquiring a data analytics company for growth prospects.
“So now that the IPO is done, we are going to be focusing on the opportunities coming in front of us. We have a three-year window in terms of utilising the IPO proceeds from an acquisition perspective, but we believe that we'll be able to execute much faster,” said Sethuraman.
As per the red herring prospectus, the company was intended to utilise ₹147 crore from net proceeds to fund inorganic growth opportunities over a period of three calendar years from the date of listing of equity shares.
“We are looking at finding smaller companies, which we can potentially acquire. We want to be very careful and selective there as well. Companies, which are having the right kind of model, approach, one that can bring in some stickiness, either in the form of an intellectual property (IP) but also aligned with our interests,” he added.
|Things Latent View is looking for in a target company|
|Small companies, which are into data analytics, data consulting, data engineering and so on|
|Those who have strong client base in the US and Europe|
|Companies handling client base under segments like technology, automotive, oil and gas, logistics, retail, consumer products, BFSI|
|Also, firms that do advance analytics|
|Stickiness in terms of long-term relationship with clients|
From a geographic perspective it is looking for companies that have a good hold of clients in the United States and Europe.
Talking about the revenue growth guidance for the next few years, the company said that, “While the industry reports of 18 to 20% growth rate, our goal and endeavour is obviously better that number, which is what, at least for the current year,” said Rajan Venkatesan, chief financial officer at Latent View.
15-year journey to become a billion dollar company
Latent View started out with business in the Indian market into banking, financial services and insurance (BFSI) with insurance in specific. Later in 2007, when the financial crisis started it used the opportunity to pivot two ways. One focusing on the US market and later on the West Coast of the United States.
“We didn't grow significantly during FY19-21 because we were actively reshaping the business. So today, the margin profile is more attractive, we have a better book of work. In the last one year alone, we have been able to sign new contracts and build relationships. We are providing services across the data analytics spectrum and not just doing one particular thing,” said Sethuraman.
While the company is already working with some of the large technology companies like Adobe, Uber Technology and 7-Eleven, its aim is to work with as many Fortune 500 companies as possible.
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