ABM Knowledgeware Ltd

ABM Knowledgeware Ltd promoted by Mr. Prakash B. Rane, is one of the few IT companies in India with
exclusive focus on E-Governance since 1998. Within a short span of time it has attained a leadership position
in the niche space of E-Governance. The company has conceptualized various pioneering and successful
strategic solutions in E-Governance, which have become benchmark in the industry. ABM was recently
awarded the "NASSCOM Emerge 50 Leaders 2009", which acknowledges ABM's achievements as top 10
emerging companies in India.

HBJ Capital’s “Business Insight” stock for the month of August 2010
HBJ Capital, India
Web: www.hbjcapital.com
E-Mail: info@hbjcapital.com
Call: +91 98867 36791
Best Buying Price…

2 Phase Buying Strategies Suggested [Always buy in SIP ways]

1st Phase : Buy at the current price range Rs 65-68 [60% of investment]

2nd Phase : Add if the price falls down to Rs 50-55 [40% of investment]

>>>Expect at least 10-12 times returns in next 3 years time frame!!!

Note:- The above Best buying price is based on the E-mail communication sent to the
“Penny Stock Package” subscribers on 19th Aug’10.
 HBJ Cap is growing
faster than ever.
HBJ Capital can be your
50x in 3years
investment.
Ask how?

Aim to become #1 -
Equity Research
Company in India
by 2012, the same
year we have
planned to get it
listed at BSE/NSE.
What Next?
HBJ Capital – “Specialists in discovering multibagger stocks” is
launching more & more innovative products & services with
single focus on long term wealth creation!!!
Table of Contents
 From the Desk of CEO, HBJ Capital – (Page – 5 )
 Overview : ABM Knowledgeware Ltd – (Page – 7)
 E-Governance – (Page – 10)
 The $10 Billion Indian E-Governance Market – (Page – 15)
 EIC Framework – (Page – 26)
 ABM Knowledgeware Ltd – (Page – 27)
 Projects of ABM – ( Page – 32)
 Ingredients of ABM – (Page – 39)
 Intellectual behind ABM – (Page – 43)
 Peer Comparison – (Page – 46)
 Financial Analysis – (Page – 48)
 Investment Rationale – (Page – 53)
 Risks Involved – (Page – 56)
From the desk of CEO, HBJ Capital
Flow of information is must to
develop a nation. If E-
Governance in India is well
organized, no one can stop
India to become ‘Super Power‘
by 2020. E-Gov will be in full
swing by 2014. Govt. is
planning to invest 40K crores
in the years to come.
Companies operating in this
sector will reap benefits out of
this opportunity.
Dear Investors,
In the past, service delivery mechanisms of the
government departments left much to be desired in India.
Cramped spaces; shabby ambience; discourteous dealing
personnel and their chronic absenteeism; demands of
gratification; inefficiency in work; long queues; procrastinating
officials; procedural complexities; etc., were some of the
undesirable features of the working of the government
departments.
Consequently, a visit to government department by
a citizen to make use of any service used to be a harrowing
experience. With the rising awareness amongst the citizens and
their better experiences with the private sector – the demand
for better services on the part of government departments
became more pronounced.
E-governance, which is a paradigm shift over the
traditional approaches in Public Administration, means
rendering of government services and information to the
public using electronic means. It has ushered in transparency
in the governing process; saving of time due to provision of
services through single window; simplification of procedures;
better office and record management; reduction in corruption;
and improved attitude, behavior and job handling capacity of
the dealing personnel.
Contd..
Applying for local government services and accessing official data may soon become easier, with the
information technology department looking to roll out an NeGP, e-District etc. All of India's 626 districts
will have to automate 6-10 services, such as pensions, ration cards, filing of cases in revenue courts,
issuance of caste, marriage, income and employment certificates, etc. E-district is one of the 27 mission
mode projects being executed as part of India's push towards e-governance.

In all, the total outlay for all projects together is almost INR 40,000 crore, inclusive of both capital
expenditure and the operational expenditure. Almost INR 10,000 crore has already been done, and
another INR 30,000 crore will be incurred during the remaining project life.

MPS is proud to bring you the “Business Insight” pick of the month – ABM
Knowledgeware Ltd.
ABM Knowledgeware Limited is the fastest emerging company in the E-Governance space. Company
has recently bagged order worth 60 crore. It has to replicate its software in 231 locations in Maharashtra.
ABM has already started witnessing opportunities in other cities and states. Looking forward it is trying
to capture the market of commonwealth countries. This is an opportunity for ABM to make its strong
footing in industry and investors should take a long term perspective to get the best return from this
stock.

Regards,
Kumar Harendra, CEO, HBJ Capital, www.hbjcapital.com & www.multibaggerpennystocks.com
#912, 1st "F" Main Road, Girinagar 2nd Phase, BSK 3rd Stage, Bangalore – 85
Call : 098867 36791, 080 6568 1134 or Mail : Info@hbjcapital.com
Overview
ABM Knowledgeware Ltd – Overview
Some key stats..
 CMP = Rs 84.50 (August 27th 2010) – The stock
was suggested on 19th August’10 when it was
trading at Rs 66.95. Since then the stock has
appreciated by almost 26%, while it touched a
peak of Rs 98.45
 52 week’s high/low = Rs 98.45/40.60 – The stock
recently made a new 52 week high. As it is in
the strong bullish phase it can continue to make
new highs.
 Peak share price = Rs 98.45 (24th August ‘10) –
The stock scaled a new high just a few days
back. The stock deserves a re-rating and we may
see ABM continue making new highs.
 Trading volume = Avg. 1.42 lacs shares
(approx) per day –Earlier the volume was low
however in the last few days the liquidity has
improved with investors rushing in.
 EPS = Rs 8.71 – Company has recorded an EPS
of Rs 8.71 on trailing twelve months basis.
 PE = 9.95 On the basis of annualized forward earnings
the stock is available at a PE of 5-6 which is a discount
compared to the industry standards.
 Book Value = Rs 26.00 - The current stock price at Rs
84.50 is trading at about 3.45 times its book value price.
 Shareholdings : No Of shares [% Share Holding ]
 Total FII: 3.2 lakhs [3.22%]
 Total Non-Institution: 18.67 lakhs [18.67%]
 Total Bodies Corporate Holding: 18.11 lakhs
[18.11%]
 Total Promoters: 60 lakhs [60%]
 Total Outstanding Shares : 100 lakhs [100 %]
 Debt/Equity = 0 [Mar’10]
 ROCE = 44.5% [Mar’10]
 RONW = 29.5%[Mar’10]
 Current Ratio = 2.31[Mar’10]
 Delivered Volume per day = 45.87%
 BSE Code 531161
E-Governance
What is E-Governance???
E‐Governance is slowly becoming a buzzword in the corridors of power. What actually then is E- governance?

 In simple terms Electronic Governance can be defined as giving citizens the choice to access
government information and services wherever & whenever they want.
There are three aspects to the E-Governance –
1. IT enabling the government functions - something similar to back-office automation,
2. Web-enabling the government functions so that the citizens will have a direct access, and
3. Improving Government processes so that openness, accountability, accuracy, speed of operations,
effectiveness and efficiency may be achieved.
Typically, this would mean web-enabled applications, but E-Governance would also cater to
automated applications for the government sector, which helps in achieving SMART governance
which some define as:
 Speed
 Moral
 Accountable/Accurate
 Responsive and
 Transparent Governance

 ICT (Information, Communication & Technology ) model helps to develop strong and healthy
relationship between:
 G2C (Government & Citizens),
 G2B (Government & Business Enterprises) and
 G2G (between Governments).
Benefits by E-Governance..
 The government to government (G2G) sector:
It is felt that governments at the union, state and local level must enhance and update their own
internal systems and procedures before electronic transactions with citizens and business are
introduced. There are number of advantages with G2G initiatives:

1. Cost Savings,
2. Increasing the speed of the transactions,
3. Reduction in the number of personnel necessary to complete a task,
4. Improving the consistency of outcomes and
5. Improvement in the management of public resources.

 The Government to citizen (G2C) sector:

Facilitates citizen interaction with government, which is primary goal of e-government.
Government to citizen initiatives also strives to enhance access to public information through the use
of websites and kiosks. There are number of advantages with G2C initiatives:

1. Single Window replaces various departments,

2. Improves efficiency,
3. More reliable outcomes,
4. Direct contact with concerned persons &
5. No agents\ brokers required.
Transactions, such as payment of taxes, renewing licenses and applying for certain benefits, will be
less time consuming and easy to carry out. Citizens can carry out variety of tasks, especially those that
involve multiple government departments, without initiating contacts with each government
department individually.
Contd…
 Government to Business (G2B) sector:
Includes both the procurement of goods and services by the government as well as the sale of
surplus government goods to the public online.
There are two motivating forces behind G2B:

1. The business community prefers to carry out its activities such as sales, procurement, and hiring
through electronic means. There are large numbers of software companies, which are producing
number of products focusing on performing routine business activities on line.
a) It benefits to extend the cost savings realized through Business to Business (B2B) transactions to
their business with union, state and local level governments.
b) It helps to improve the efficiency of the operations in G2B & B2B.

2. The second reason for the growth of G2B is the demand for cost cutting and efficient procurements
in the government. Developing countries, where there is great pressure to minimize costs due to
shortage of funds, G2B are being encouraged by the governmental agencies.
Benefits of E-governance..

ICT-enabled connected governance

contributes to:

Internally Externally
1. Greater coordination & 1. ‘Single Window’ for various
communication departments.
2. Avoidance of duplication 2. Faster service delivery
3. Reducing transaction costs 3. Greater efficacy
4. Simplifying bureaucratic procedures 4. Increased flexibility of service
5. Greater efficiency delivery
6. Enhanced transparency 5. Innovation in service delivery
7. Information sharing between 6. Greater participation
agencies 7. Greater citizen empowerment
8. Security of information management 8. Better control & management
The 10 Billion Dollar Indian
E-Governance Market !!!
E-Governance: Structure
National
.. e-Governance Plan
 The Government of India had approved the NeGP in May 2006 with the vision: "Make all
Government services accessible to the common man in his locality, throughout common service
delivery outlets, ensure efficiency, transparency & reliability of such services at affordable
costs to realize the basic needs of the common man".

 The NeGP currently consists of 27 Mission Mode Projects (MMPs) and 8 Support Components to
be implemented at the Central, State and Local Government levels. These include Projects such as

Income Tax,
Passport/VISA
 Company Affairs
 Central Excise
 Pensions
 Land Records
Road Transport
 Property Registration
 Agriculture
 Municipalities
 Gram Panchayats (Rural)
 Police
 Employment Exchange
 E-Courts
Contd…
 Government has already spent about INR 10,000 crore ($2.91 billion) on such projects & is expected
to pump in another INR 30,000 crore in other various projects under the National e-Governance
Plan (NeGP) in the next few years.

 14 major E-Governance projects, including some high-profile ones such as MCA-21, have already
gone live. The Indian government aims to have all 27 mission mode projects envisaged under the
E-Governance blueprint ready by end 2014.

 State Wide Area Network (SWANs): Government has approved the scheme for establishing State
Wide Area Networks (SWANs) in 29 States and 6 UTs across the country at a total cost of Rs 3334
crore.

 Common Services Centre's (CSCs): The CSC scheme envisages the establishment of 100,000
broadband Internet - enabled kiosks in rural areas, which would deliver government and private
services at the doorstep of the citizens.

 An additional 10,000 CSCs would be set up in the semi-urban/urban areas.

 The bid process for selection of the Service Centers has been completed for a total of 92560 CSCs in
19 States.

 80,000 Common Services Centre's have been set up across India; the number is expected to reach
one lakh by the end of the fiscal year.
Contd…
 State Data Centers (SDCs): State Data Centers are proposed to be established across 29 States & 6
Uts in the country along with Disaster Recovery (DR) in order to provide shared, secured and
managed infrastructure for consolidating and securely hosting State level data and applications.

 The SDC scheme was approved by the Government in January 2008 at a total cost of Rs 1633
crore.

 DIT has sanctioned SDC proposals of 23 States at a total cost of 1077 crore.

 Government of India has approved a Capacity Building Scheme for setting up State e-Mission
Teams (SeMT) at a total cost of Rs 313 crore in January 2008.

 Over 600 e-government services are now available electronically.

E-District…
 E-District has been selected as a National MMP under the NeGP and is to be implemented by the
DIT. E-Districts are the de facto front-end of government where most Government-to-Consumer or
G2C interaction takes place. The E-District project was conceptualized to improve this experience
and enhance the efficiencies of the various Departments at the district-level to enable seamless
service delivery to the citizen.

 Front-ends under the scheme, in the form of citizen facilitation centers, are envisioned to be built at
District-, Tehsil-, Sub-division- and Block- levels. Village-level front-ends would be established
through Common Services Centre's (CSCs) for delivery of services.

 More than 55 services will be delivered through this medium to the citizens. Few of them are
mentioned below:-

 Certificates: Creation and distribution of certificates for income, domicile, caste, Birth, Death etc.
 Licenses: Arms Licenses etc.
 Public Distribution System (PDS): Issue of Ration Card, etc.
 Social Welfare Schemes: Disbursement of old-age pensions, family & widow pensions, etc.
 Complaints: Related to unfair prices, absentee teachers, non-availability of doctor, etc.
 RTI: Online filing and receipt of information relating to the Right to Information Act.
 Linking with other e government projects: Registration, Land Records, and Driving Licenses, etc.
 Information Dissemination: About government schemes, entitlements, etc.
 Assessment of taxes: Property tax, and other government taxes.
 Utility Payment: Payments relating to electricity, water bills property taxes etc.
MCA-21
 The MCA 21 project is an outcome of the MCA's quest for simplifying forms, making forms e-
centric, promoting online transactions, and reaching out to stakeholders in an economy that is
growing fast and adjusting to the demands of globalization.

 MCA 21 services are available 24X7 anytime and anywhere through MCA Portal.

 With more than 8 Lakhs registered entities, the MCA has over 60 million pages of corporate
information in its database.

 Procedures relating to sorting, storage and retrieval of paper-based records were cumbersome and
time-consuming. The portal registered an average of 17 Lakh hits per day. The e-filings till then
totaled 23.77 lakhs.

 The MCA 21 has obtained the Excellence in Government Process Re-engineering Category Award
2007-08 (gold).
E-Government Initiative @ State Level
 Project JEEVAN in Delhi.

 Project SAMPARK in Chandigarh.

 Project BHOOMI in the state of Karnataka.

 Project ASHA, SANWAD in the state of Assam.

 Project E- MITRA service centre's in the state of Rajasthan.

 Project GYANDOOT, ROGI KALYAN SAMITIS, in the state of Madhya Pradesh.

 Project KOSHVAHINI, WARANA "WIRED VILLAGE“ in the state of Maharashtra.

 Project SUSTAINABLE ACCESS IN RURAL INDIA (SARI) in the state of Tamil Nadu.

 Project JANANI SUVIDHA YOJANA, AKSHAYA, SWIFT, PEARL, ASRAYA in the state of
Haryana.

 Project E-SEVA, BHU BHARATI, E-VILLAGE CHILUVURU, UNPAN virtual library & smart
government in the state of Andhra Pradesh.

 Project JAN SEVA KENDRAS, THE CHIRANJIV YOJANA, NIRMAL GUJARAT, SWANTAH
SUKHAY in the state of Gujarat etc.
Challenges for E-Government in India:
The governments both –the Union and the states must make earnest efforts to complete the daunting, but
formidable task of quicker and effective E-government programs by:

1. Making a policy choice in favour of computerization to overcome radically.

2. Serious efforts would be required to mobilize resources for this arduous job. One way to deal with
the situation could be that governments enter into arrangements for leasing of computers.

3. Establishing complete connectivity between various ministries and departments so that transfer of
files and papers could be done through Internet thereby choosing efficacious speed as an alternative
to manual labour.

4. Supplying information to the public in a language that they understand and are comfortable with,
and generally, it is the local language. As technology is available by which transliteration from
English into other languages can be made, therefore, the problem is manageable provided there is
enough motivation to do this onerous task.

5. Changing the mindset of the government employees who are used to working only in the manual
mode. This is a big task and needs patience and careful planning. Workshops, seminars, and training
programmes are required to be organized to spread awareness among the employees at all levels.

6. Build supporting infrastructures of power and all weather surface transport system to bridge the
digital divide between the rural and urban India.
Statistics after few E-Governance Projects…
Time Savings Affordable
Simplicity of Reduction in
State Project Ease of Use compared to cost of Total
procedure Corruption
manual service
Rajiv Gandhi Computer
Assam Literacy Program 10 10 10 10 10 8.9
WB Land Records – Hoogli 9 7 9 10 9 7.6
WB Tele-Medicine Midnapore 10 9 10 10 10 8.8
WB Gram Panchayat Kanaipur 10 7 9 9 9 8.6
Computer Literacy and
WB Training Program 8 10 10 5 10 8
Sikkim CIC – Temi 10 9 10 8 10 8.9
Sikkim Land Records – Namchi 10 8 10 10 10 8.1
AP Rural e-seva – West Godavari 10 8 10 10 9 8.9
Delhi Transport – IP Estate 10 8 10 10 8 8.1
Property Registration – Simla
HP rural 9 9 9 10 8 8.2
HP Land Records – Suni 9 8 9 5 9 7.6
Punjab Suvidha – Kapurthala 10 8 10 9 9 8.9
Punjab Property Registration – Sang 9 8 9 10 4 7.4
Punjab Transport – Ropar 10 9 9 10 7 7.7
Center IT in Judiciary – NIC 10 9 10 10 9 8.9
Center Customs – NIC 8 8 9 10 6 7.6
Average 9.5 8.4 9.6 9.1 8.6 8.3
Key Ingredients of Govt Transformation..

• Department • Process
Centric orientation

Customer Service
Centric Orientation

E-Governance

Outcome
Integrated
Based
View
Assessment

• Output
• Department
Based
View
Assessment
EIC Framework..

Expected GDP is 8.6

Total Spending for FY2010-
11 is Rs.11.87 trillion. The
total FII inflow in equity
during January to May 2010
was US$ 4606.50 million
while it was US$ 5931.80
million in debt.
Government spending for E-
Governance sector is
projected to be 40,000 Crore
and this gives boost to IT
Companies operating in this
sector. Govt has already spent
10,000 crore.
ABM has bagged an order of
60 crore and it grabbed a
project in 2008 worth Rs. 116
crore from MCGM.
Currently sitting on 100 Crore
order book.

In such a bullish Economy, and with a huge investment in e-Governance sector, ABM has
very good future prospects. The results of June 2010 are telling the growth story of ABM.

ABM has been selected to replicate the KDMC solution at 231 locations in Maharashtra.
ABM Knowledgeware Ltd
Basic Details..

 ABM Knowledgeware Ltd., (ABM) is an IT Company listed on Bombay Stock Exchange. By a rough
estimate, ABM’s e-Governance Solutions altogether are delivering 4.2 Million G2C and G2B services per
year.

 ABM has developed a thorough insight in implementing and institutionalizing e-Governance in the
Indian context, which is evident from the various projects implemented by ABM so far.

 NASSCOM recognized it as one of “The Top 10 Emerging IT Companies in India” in 2009 which amply
demonstrates the capabilities and the growing stature of ABM in the IT space.

 ABM’s Product MAINet ™ has been adopted by Govt. of Maharashtra for roll out in all the 231 Urban
Local Bodies (ULBs) across the State of Maharashtra.

 Recognitions such as 13th and 120th fastest growing Technology Company in India and Asia-Pacific
respectively by Deloitte in their Fast 50 and Fast 500 programme in 2008.
Basic Details..

 ABM has grown over 600 percent in terms of revenues and human assets in the last 5 years.

 Current business focus is on niche domains such as

 Providing e-Governance solutions to Municipal Bodies (G2B & G2C);
 CRM solution for Electricity Distribution Companies (G2C) and
 Automation of Billing, Accounting and Collection for Water Distribution Authorities (G2B,G2C).

 The company first came to the public’s notice when it was doing a project called “SETU” for Thane
Collector ate.

 ABM has a business partner called Seven Seas Computers in Dubai and this entity has been working
closely with ABM to promote its UAE business.

 Solutions are mostly in use in the Western states of India and now ABM is looking at scaling to other parts
of India.

 Company is also planning to grow inorganically and it is looking at various options in the UK.
Few Milestones..
 In 1998, Empanelment in the Turn Key Solution Providers in IT (TSP) panel of Government of
Maharashtra with the first ever 15 IT Companies.

 Successful and path breaking Pilot Projects of e-governance in Housing Department Mantralaya (1999),
Municipal Corporation of Greater Mumbai (Citizen Facilitation Center – CFC) in 2000, Thane Collector ate
(Setu ®) in 2000 which were subsequently replicated on mass scale by govt.

 CSI-YITP Award for ABM’s e-Gov products: ABM CARE ®and ABM MOIS 2000®.

 A largest Municipal Body in Asia replicated ABM CFC ®in all their 24 Municipal Wards as the first Citizen
Centric e-Gov initiative in 2002.

 Govt. of Maharashtra announced Rajiv Gandhi Award for Administrative Reforms for ABM’s Setu ® at
Thane Collect orate

 CSI Award for Best Citizen Centric Project for Setu ® at Thane Collect orate in 2003.

 Launched ABM’s prestigious e-Governance Solutions viz. ABM MAINet ® in Kalyan Dombivli Municipal
Corporation (KDMC) as the first Comprehensive e-Governance solution for Urban Local Bodies in India.

 KDMC’s e-Governance Project bagged "Intelligent Enterprise Award" for MAINet ™ by India Express
Group at Colombo.

 Entry into Consumer Relationship Management(CRM) Space for Power Sector through a multi-crore order
for ABM CFC ® from an Electricity Distribution Company for roll out of ABM CFC ® all over
Maharashtra.
Few Milestones..
 KDMC was awarded with "e-Governance Champion Award" for outstanding contribution in the domain
of e-Governance by Dataquest, where ABM’s software solution –MAINet ™ has been implemented.

 Empanelment with State Governments of Goa, Punjab, Haryana, Uttar Pradesh and National Institute of
Smart Governance.

 Won the prestigious "Wisitex India Urban Development Lead Organization of the Year-Information
Technology" award, conferred by Minister Urban Development ,Govt of Goa.

 Received "Deloitte Technology Fast 500" award as120th Fastest Growing Technology Company in Asia-
Pacific.

 Received "Deloitte Technology Fast50" award as13th Fastest Growing Technology Company in India.

 Bagged a single order of Rs. 116 Crores from Municipal Corporation of Greater Mumbai for SAP
Optimization, enhancements, change management etc.

 Winner in " NASSCOM EMERGE 50 LEADERS " in recognition of ABM's outstanding work in domestic
markets as TOP 10 emerging IT companies in India

 Ministry of Urban Development, Govt. of India has awarded National Urban Water Awards (NUWA) on
Municipal Corporation of Greater Mumbai (MCGM) for ABM’s Water Billing & Accounting
Software viz. : ABM AQUA ®, which is being used across their 24 municipal wards.

 ABM has been awarded E-Government contracts worth Rs. 60.03 Crores for implementing its e-
Governance Software - ABM MAINet ® in 231 Municipal bodies all over the state of Maharashtra.
Projects of ABM
Project @ KDMC
 Objective of creating a system driven Municipal Corporation with highest levels of Transparency,
Accountability and Citizen Servicing Standards, Kalyan Dombivli Municipal Corporation (KDMC),
initiated its journey into e-Governance in 1999. KDMC took a decision for total computerization of the
Corporation with a holistic approach. The entire e-Governance solution was conceptualized, designed,
developed and implemented by ABM Knowledgeware Ltd. This was implemented to re-design the entire
400 process which was carried out by KDMC.

 Hon. Chief Minister of Maharashtra, Shri Vilasrao Deshmukh, dedicated this e-governance project to the
citizens of KDMC on 24th of September 2002 & expressed that this pattern could be replicated in other
Municipal Corporations.

 Today, with total 7 CFCs, located in various ward offices of KDMC, connected by Leased Lines, Fiber
Optics or Radio Frequency, KDMC's e-Governance is by far, the most comprehensive & successful
computerization project in Maharashtra and perhaps across India, and has set an example of good
governance for all Government Organizations in India.

 Government of Maharashtra has taken decision to roll out this software across all the ULBs in
Maharashtra. Ministry of Urban Development, Govt of India has short listed this solution for
recommendation to ULBs covered under funding for JNNURM scheme which is meant for up gradation of
the urban infrastructure and urban governance .

 ‘This project gave a rise to ABM and it was one more to add on the kitty of Mr. Rane. ABM got several
orders due to this projects. ABM started making mark in e-governance sector and played a vital role to
improve the Government.’
Projects..
 It was focused on the Decentralization and
Computerization of entire Assessment, Billing
and Collection of Property Tax for all 24 wards
offices at MCGM.
 MCGM serves over 1.27 crore (12.7 MN) citizens
with the help of approximately 1,17,000 staff
deployed over 68 departments spread across 437
square kilometers span.
 Property Tax Assessment and Collection
Department (A & C) is one of its largest
departments that contribute more than 25% of
revenue to Municipal Corporation of Mumbai.
 The key functionalities of this department are
Assessment of Properties, Billing and Collection.
Approximately 2500 staff contributes towards
fulfilling the activities of this department from 24
ward offices across Mumbai.
 The MCGM (Municipal Corporation of Greater
Mumbai) project has gone live in April 2007. This
would cover core functions like Finance,
Materials Management, Project Systems, Human
Resource, Funds Management, Plant
Maintenance and Real Estate. Apart from this, it
would also cover a specific Public Sector function
i.e. Citizen Portal and Ward Management.
 Initially the value of this contract was US$ 10Mn,
which includes engagement with MCGM for 5
years, after implementation during the term of
the project.
 ABM bagged this because of its Quality Service
and creditability in MCGM.
 ABM provided Subject Matter Expertise, software
licenses and entire post-implementation support
to MCGM.
Projects..
 Citizen Facilitation Centre (CFC) is named Setu
(means Bridge) signifying a bridge of facilitation
between citizens and the government.
 Objective: Time Bound Service Delivery to
citizens by establishing a computerized CFC for
rendering various Citizen Services in a phased
manner but with more convenience, speed and
measurable performance without compromising
the credibility of the process.
 “Setu®” was designed, developed and
implemented by ABM in year 2000.
 This project was rolled out by the state Govt in
the entire state after its initial success in Thane
District.
 This project went on to win several awards at
state and national level.
 ABM presented a comprehensive proposal, which
also involved high degree of BPRs and new
methods of inter-departmental collaborations for
over 20 departments and agencies.
 It was decided to first implement first phase of
the project with the help of Thane Belapur
Industries Association (TBIA).
 This center was named as “Udyog Setu”. ABM
commissioned the center within 3 months of
receiving the work order in August 2004.
 It provided more than 5000 services in initial 2
years period.
 The initial scope was limited to direct services
provided by DCI and MIDC. Later 3 services of
Maharashtra State Pollution Control Board
(MPCB), were also added to the kitty.
Projects..
 MCGM serves over 1.27 crore citizens.
 MCGM provides are almost 100+ services and it
gives immense scope for ABM in near future.
 ABM implemented the entire solution for water
billing and accounting at MCGM.
 Database is centralized, so consumers can make
payment of AQUA bills in any of 24 wards of
MCGM spread across the entire city .
 In near future, this solution can be in demand as
others are and can be asked to replicate it over
other Municipal Corporation.
 ABM has successfully implemented Birth &
Death, Property Tax Assessment and Billing
software and Water Billing modules at MBMC.
 For Market License, Accounts, Complaint And
Redressal Monitoring (CARE) are also in demand
by MCGM
 Around 1.5 Lakhs properties are assesses by
MBMC under this e-Governance implementation.
 MBMC is evaluating possibility of increasing the
scope of existing e-Governance solution by
opting for comprehensive solution for e-
Governance as implemented by KDMC
(MAINet™ –Municipal Administration
Information Network)
Projects..
 Based on the evaluation of bids and
recommendations from Delloitte, MSEDCL
selected ABM Knowledgeware Ltd. in 2005, for
providing the application software and for
providing manpower for to operate the CFCs.
 ABM delivered the application software, ABM
CFC® as per the envisaged scope of CFC
functioning. ABM operated the 50 pilot CFCs till
March 2010.
 Thus, the 50 pilot CFCs were operational for
varying periods, ranging from thirty six months
to fifty one months.
 ABM is aiming at all the 500 divisions to
implement its software.
 Major area of revenue generation for any ULB is
from the property tax collected.
 To tap on this department UMC wanted to
implement a solution for property assessment
and billing.
 UMC has approved the project of implementation
of more comprehensive scope of e-Governance as
a next step and the project is under
implementation under the JNNRUM scheme of
Govt. of India.
 UMC has chosen MAINet™ for this project.
 Total properties being assessed by UMC is
approximately 1.6 Lakhs
Projects.. MAINet™ Replication
Govt. of Maharashtra has undertaken an ambitious
project of rolling out e-Governance in 231 municipal
bodies across the state.

Around 42% percent of the urban population in

Maharashtra will get better citizen services as a result of
this project.

Citizen centric e-Governance will be in place for all the

ULBs by covering all the Citizen services, Revenue Dept,
Accounts, Portal, MIS and integration with GIS.

ABM has been selected as the Software Implementation

Partner (SIP) for this project.

ABM has targeted to complete it by 2012 whereas the due

date for completion is March 2013.
Ingredients of ABM
Business Verticals..
1. ERP practice in Govt segment has 3
distinct segments, viz. Supply of
License, Implementation and Post
Implementation support for extended
periods for Institutionalization of ERP.

2. In Urban Local Bodies segment, ABM is

offering its ABM MAINet &
Implementation of SAP with and
without integration with ABM
solutions.

3. ABM offers solutions like ABM CFC ®,

ABM AQUA ®, ERP Solutions from
MNCs like SAP bundled with ABM’s
Subject Matter Expertise IT Services for
implementation & post-
implementation .

These verticals are having ample of scope to

penetrate and the government is on the bull
to improve its services, which gives an
opportunity for ABM to explore revenue and
value.
Products..
1. MAINet ™ Enterprise is an integrated
suite of application products to manage
the complete working of a typical
ABM MAINet ® municipal corporation of any size. This
is the key product for revenue
generation in coming years.

2. ABM CARE ® is browser-based, which

can be installed at a citizen/consumer
interface like CFC (Citizen Facilitation
Center) or on a Website for accepting
CRM ABM complaints from citizens. For
Solutions CARE ® development of an economy, a citizen
PRODUCTS has to be satisfied by its government
and its services.

3. ABM MOIS 2000® is powerful tool

which facilitates the Herculean
task done by any government or semi-
ABM MOIS 2000® government organization of having to
manage and work on a large number of
letters and cases/files every day
involving complex work-flows.

4. CRM Solutions is similar to CFC

model.
Trademarks..

 Trademarks helps to protect the business and the product.

 It protects from piracy and duplication.

 Give recognition to the product and space in the market.

Intellectual behind ABM
Management..

Mr. Prakash B Mrs. Supriya Mr. Govind Mrs. Vimla Mr. M. N. Dr. Ajit
Rane, Rane, Director Singh Varghese, Ahmed, Kulkarni,
Managing & Member of Chauhan, Vice Project Chairman of Member of
Director Audit President Director Audit Audit
committee committee committee

 “KeyMan” of the company, Mr. Prakash Rane is on the driving seat and he is planning exceptionally well
for the company. He was conferred National Entrepreneurship award in 2008 by Marathi Chamber of Commerce.
 The Company has benefited from vast experience of over a decade in IT of Mrs. Supriya Rane.
 Mr. Govind is responsible for Large account acquisition, increasing account penetration and account growth
and Expansion of the business in newer Geography.
 Project Director Mrs. Vimla is having international exposure & 28 years of experience in Business
Development.
 Mr. M. N. Ahmed is the Chairman of Audit Committee and Shareholders Grievance & Share Transfer
Committee of the Company.
 Since Inception the management is unchanged. This gives them better understanding of the business &
future prospects of the company.
Share Holding Pattern..

 Promoter holding is more than 60% in the company.

 More than 1% of total shares of the company are held by following entities:
 The Indiaman Fund (Mauritius) Ltd 3.20%
 Balini Properties Pvt Ltd 1.20%
 Lipsita Properties Pvt Ltd 6.91%
 Computer Digital Network Ltd 2.50%
 New Computer Era Ltd 5%
 Rosewell Group Services Ltd 2.50%

 Most of the above entities have been holding stocks of ABM for more than 5years which
reflects their confidence in the better future and better growth prospects.
 The total holding (Promoter & these entities) comes nearly to 82% indicating the confidence
of promoters and investors of the company.
 The Indiaman fund (Mauritius) Ltd recently purchased 3.2% of the total shares.
Peer Comparison
Peers Comparison
 There are many companies in the listed space which proclaim themselves as the companies into E-
Governance sector, however most of them hardly derive any revenue from E-Governance.

 Vakrangee software (VS) is one of the companies which is specifically in the space of E-Governance.

 Comparison of both the companies will give a conclusion about the right pick.

 ABM is in the state of Maharashtra and recently Vakrangee Software also entered the zone but could not
bag any major projects from Maharashtra.

 ABM commands a lower P/E, higher margins and nil debt in comparison to Vakrangee Software’s higher
PE, lower margins and some Rs 60 crore debt.

ABM VS
In terms of MCAP, ABM is a perfect fit for a multibagger & the CMP 84.50 195.60
company is sitting on a good order book.
MCAP 85 crore 440 crore
On the basis of annualized forward earnings the P/E comes at 5-6, P/E 9.70 14.50
which gives a potential to the stock to perform much better.
EV/ 4.41 4.95
EBITDA
With the type of penetration in the market, its leadership in E-
Governance space will continue for a very long period. NPM% 18.18% 5.74%
EPS 8.71 13.48
Financial Analysis
Income Statement – Last 4 years
 ABM has been a consistent
performer for the last 4 years
with a 24% CAGR in revenue
and more than 70% CAGR in
Net profit

 In FY 2009-10, revenue has

decreased but the net profit has
increased because of the cut
down in expenses.

 Phenomenal growth in NPM

over last four years (6.41% to
18.18%).

 Company has various orders in

the Pipeline and it is expected
that it will increase its revenue
by 40-50% for FY 11 over FY 10.
Income Statement – Quarterly

 The imminent growth of ABM can be gauged from the fact that it has increased its revenue by 60% from
Mar-10 to Jun-10.
 During Mar’10 quarter, the company has posted an EPS of 1.93, whereas in Jun-10 it is 2.94. almost 50%
increase in EPS on QOQ basis.
 The Net profit margins of the company have been steady at 17-18%.
 Since Jun-09 company is increasing its revenue QOQ and the Sep-10 quarter is also expected to follow the
increasing trend.
Balance Sheet..
 The company has a very clean balance
sheet with zero debt on it’s books.

 Cash balance is more than 20 crore and

the company has made an investment of
1.2 crore in Mutual fund of Reliance and
purchased shares of Canara bank. The
investment is very much liquid.

 With more than Rs 20 crores in cash and

liquid investments, the company has a
very comfortable working capital
situation.

 The company enjoys regular payments

from the Government, as can be
observed from the Sundry Debtors
figure going down from Rs 18.67 crore to
Rs 15.07 crore.

 With so much cash, the company can

look at acquiring small players in
various states and get a head start in
various locations.
Contd..
 The company has been able to grow it's revenue from Rs 5.55 crore at the end of Mar'06
to Rs 38 crore at the end of Mar'10.

 The company has seen an exponential growth in it's bottom-line from Rs 0.24 crore at
the end of Mar'06 to Rs 6.87 crore at the end of Mar'10.

 In the first quarter ending Jun'10, ABM has come out with a stellar performance. The
revenue for the quarter ending Jun'10 stands at Rs 17 crore, a 57% increase on QOQ
basis and 107% increase on YOY basis.

 The net profit for the quarter ending Jun'10 stands at Rs 2.94 crore which is a 52%
increase on QOQ basis and 167% increase on YOY basis.

 The company maintains a cash reserve of Rs 21 crore which brings down the enterprise
value of the company down to Rs 45-46 crore approximately.

 The EV/EBITDA multiple of the company is around 4.5 which is one of the lowest
across the industry.
Investment Rationale
Near Lifetime high…

Strong support @ 60

Large volume

 The stock is in the uptrend phase & is looking strong on charts as it is making new (top) highs. As
illustrated in the chart , the stock price of ABM Knowledgeware Ltd was dull & underperformed for a
long period of time.

 The recent highs scaled by the company have been backed by larger volumes, thus validating the recent
upward move.

 We expect the rally to continue on account of undervaluation and the upcoming Projects & Future
Earnings.
Investment Rationale..
 The company is one of the few companies in the E-Governance space and has already established a name
for itself.

 The Government of India has planned an outlay of Rs 40,000 crore for the E-Governance sector. ABM
being a renowned player will be a big beneficiary of the same.

 ABM's product for computerization of mid-sized urban local bodies has been adopted by Ministry of
Urban Development, Government of India for recommendation to other ULBs in India. The same shall
help ABM to procure orders from other state governments besides Maharashtra.

 The recent recognition of the company by NASSCOM shall help it bag further orders in consortium with
the larger players.

 ABM is available at a PE multiple of 5.5 based on it's annualized forward earnings, while the other listed
company like Vakrangee Software's Ltd is available at a PE multiple of 15.

 The management has been maintaining their stake in excess of 60%, while we believe that they hold
another 10% through indirect holding.
Some Key Issues..
Some Key Issues..
Issues:- The following are the key issues involved with the E-Governance & thus with ABM

 Funding – Funding for the projects that are already underway is secured. But for large scale
roll out of e-Gov, funding can become a foremost issue. The e-governance initiatives can be
funded either through the government sector or through the private sector. Private sector
funding is possible for certain project that have the feasibility of creating a service that is
chargeable to citizen.

 Privacy – The privacy of the citizen also needs to be ensured while addressing the issues.
Whenever a citizen gets into any transaction with a government agency, he shells out lot of
Personal Information, which has possibility of misuse by any vested interest. Thus, the
citizen should be ensured that the information flow would pass through reliable channels.

 Delay in Decisions – ABM is largely dependent on government projects and government

decisions can be delayed due to election or change in government.

 Standardization – Defining the standards for the various Government services is another
issue that needs to be addressed. The standards need to be worked out not only for the
technologies involved but also for issues like naming of websites to creating E-Mail
addresses.
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