The shares of this microcap company locked a 5 percent upper circuit in Monday’s trading session after announcing the acquisition of an American cybersecurity firm.
Price Movement:
With a market capitalization of Rs. 852 crores, the shares of TAC Infosec Ltd started Monday’s trading session on a higher note at Rs. 812.55, clocking a 5 percent upper circuit compared to its previous close of Rs. 773.90 apiece.
What Happened:
Such a bullish movement in the stock price was observed after the company in an exchange filing announced that TAC Security, Inc., the U.S. subsidiary of TAC InfoSec Limited, had signed a share purchase agreement to acquire 100 percent of the shares of Sandia IT & Cyber-Security Services LLC (Cyber Sandia) for a cash consideration of USD 25,000 and the acquisition is expected to close before August 31st, 2024.
Cyber Sandia holds a critical State-Wide Agreement with the State of New Mexico for IT Professional Services, which makes this acquisition a strategic opportunity for TAC Security to strengthen its presence in the U.S. public sector.
Moreover, TAC Security is projecting to create a step-down subsidiary company upon the completion of the acquisition.
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Benefits of the Acquisition:
The acquisition will enable TAC Security to leverage its expertise and provide comprehensive security solutions that meet the growing demands of the public sector. It will allow TAC Security to expand its cybersecurity services nationwide across the U.S., the largest market in the world.
The acquisition marks a pivotal step in TAC Security’s expansion strategy, as the U.S. market represents a significant 70 percent of its total revenues.
By acquiring Cyber Sandia, TAC Security plans to pursue similar contracts in other states and become a trusted cybersecurity partner for government agencies across the United States.
Financials:
Looking at the latest financial performance, The total revenue (including other income) for Q1 FY24-25 stood at Rs. 5.14 crores, marking a 94 percent YoY rise from Rs. 2.65 crores in Q1 FY23-24. The net profit jumped by 93.3 percent YoY to Rs. 2.32 crores in Q1 FY24-25, as against Rs. 1.2 crores in Q1 FY23-24.
Client Base:
During the recent quarter, TAC InfoSec expanded its client base to 590 in Q1 FY24-25, as compared to 9 clients added in Q1 FY23-24, indicating a rise of 6,455.6 percent. This growth is complemented by the company’s expansion into 55 countries, up from 22 countries just one quarter ago.
In Q1 FY24-25, global brands such as Salesforce, AutoDesk, Nissan Motors, and Xerox subscribed to TAC Security products.
Prominent Investor:
TAC Security debuted on NSE Emerge on April 5, 2024, with a 174 percent premium over the offer price. Backed by stock market expert Vijay Kedia, the company raised 29.99 crores through its IPO and received bids exceeding 1 billion dollars, resulting in an oversubscription of 422 times.
Company Profile:
Founded in 2016, TAC Infosec specializes in providing cybersecurity solutions through a Software as a Service (SaaS) model. They focus on risk-based vulnerability management, cybersecurity quantification, and penetration testing for clients across various industries and sizes both domestically and internationally.
Written By Vaibhav Patil
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