Hi, is this company still at reasonable valuation given the growth prospects?

Here’s why I am excited about the fundraise and the road ahead.

Adara once had a pre-covid revenue of around $100m annually. Post-covid its revenue fell to $25m and was making losses of 15% at the EBITDA level and it was not able to recover until rategain came to the rescue and acquire it for mere $16m. Since the acquisition it has brought it a lot of synergies for rategain and has been generating cash from the very first quarter. Here’s the breakdown from the data I have analyzed based on the numbers given in the investor presentations and the concalls.

Adara has not yet reached the full potential and there is a huge runway for growth and the management has aspired to take it back its glory days (and reaching $100m revenue in the process) and even if they reach the halfway mark in year or two, it will still create a lot of value because of the operating leverage.

I don’t expect all their acquisitions to perform the same way, but they have turned around the businesses in the past (like myhotelshop) and I am waiting on their next announcement.

How is this merger going to work? What will the small retail shareholders going to get? No fractional entitlement to any shareholder (of the Transferor Company) is expected pursuant to the issuance of the Amalgamation Shares

CDSL: 10Cr demat accounts

Most companies need debt either for long term needs or for working capital. Some are using debt because cost of debt is lower and they can re invest surpluses at better rates

some companies use low rate of interest as a competitive advantage …

service based companies need little or no debt.
Consumer companies need debt in their first 10 years of existence and after that they are pretty much debt free …

There are parameters like Debt service coverage ratio and Interest coverage to check…

Hope this helps

Malolan