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DRC Systems India Ltd., a fast-growing IT services and software development firm headquartered in Gujarat’s GIFT City, has approved the issuance of 10 million equity shares at ₹25 per share. This move signals a bold capital-raising initiative aimed at fueling growth, expanding service capabilities, and strengthening its balance sheet amid a volatile tech market.
The decision was ratified during the company’s board meeting held in August 2025, and comes at a time when DRC Systems is actively pursuing inorganic expansion and deeper penetration into global markets.
Key Developments at a Glance
The board approved the issuance of 10 million equity shares at ₹25 apiece, aggregating to ₹25 crore in fresh capital
The shares will be issued on a preferential basis to strategic investors, including promoters and institutional participants
The infusion will support working capital, digital infrastructure upgrades, and potential acquisitions in the Middle East and Southeast Asia
The move follows a recent allotment of 387,000 equity shares under the company’s ESOP scheme earlier this month
Strategic Rationale Behind the Capital Raise
Strengthening Financial Flexibility
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With a current market capitalization of ₹233 crore and a share price hovering around ₹17.61, the preferential allotment at ₹25 represents a premium of over 40 percent, signaling investor confidence
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The capital will be deployed to reduce short-term liabilities and enhance liquidity buffers, especially as the company scales its offshore delivery centers
Expansion and Acquisition Pipeline
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DRC Systems recently announced its intent to acquire a majority stake in Inexture Solutions Ltd., a move aimed at expanding its global reach and technology stack
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The fresh equity will provide the financial muscle to close this deal and pursue similar strategic investments in AI, cloud, and enterprise mobility segments
Talent and Infrastructure Investment
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A portion of the proceeds will be earmarked for hiring senior tech talent and upgrading its development hubs in Gandhinagar and Dubai
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The company plans to invest in proprietary platforms for low-code development and digital transformation services, aligning with rising enterprise demand
Market Reaction and Valuation Context
DRC Systems’ stock has been trading in a narrow band between ₹17.10 and ₹17.83, with a 52-week high of ₹34.90 and low of ₹16.15
The company’s trailing P/E ratio stands at 14.92, significantly below the sector average of 46.44, suggesting potential upside if growth targets are met
Despite a 41 percent decline year-to-date, the recent announcements have sparked renewed interest among retail and institutional investors
Operational Performance Snapshot
In FY 2024–25, DRC Systems reported revenue of ₹65.4 crore, up 37 percent year-on-year
EBITDA stood at ₹21.1 crore, with PAT rising 29 percent to ₹14.9 crore
The company maintains a low debt-to-equity ratio of 0.01 and a beta of 0.51, indicating financial prudence and low volatility
Leadership Commentary and Outlook
Jainam Shah, Company Secretary, confirmed the allotment and emphasized that the capital raise aligns with DRC Systems’ long-term vision of becoming a global digital transformation partner. The company is focused on building scalable solutions across fintech, healthcare, and e-governance, with a strong emphasis on IP-led growth.
The board is expected to reconvene on August 26, 2025, to finalize fund deployment strategies and review progress on ongoing M&A discussions.
Conclusion
DRC Systems India Ltd.’s decision to issue 10 million equity shares at a premium price marks a pivotal moment in its growth trajectory. With clear plans for expansion, acquisition, and innovation, the company is positioning itself to capitalize on emerging opportunities in the global tech landscape. Investors and stakeholders will be watching closely as DRC Systems executes its strategic roadmap in the coming quarters.
Sources: BSE India, Economic Times2, ET Money, LiveMint
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