Dove Soft seeks Rs 46 crore as collections lag listed peers

Dove Soft proposes to use Rs 46 crore of IPO proceeds for working capital after its consolidated receivables cycle reached 150 days for the year ended March 31, 2026. That was about twice Route Mobile Limited’s 76 days and Tanla Platform Limited’s 75 days, while Dove Soft’s payable cycle fell to 66 days.

Why does Dove Soft need Rs 46 crore for working capital?

Dove Soft needs Rs 46 crore because receivables have grown with enterprise sales while supplier credit has shortened. The company’s fresh issue comprises up to 53,28,000 equity shares, whereas the offer for sale of up to 12,72,000 shares will not provide proceeds to Dove Soft. The fresh-issue proceeds are designated for working capital and general corporate purposes.

Dove Soft estimates total working-capital requirements of Rs 200.1258 crore, funded by Rs 154.1258 crore from internal accruals or borrowings and Rs 46 crore from net proceeds. It plans to deploy Rs 22 crore in FY 2026-27 and Rs 24 crore in FY 2027-28, with the working-capital amount to be fully deployed and used by September 30, 2027. General corporate purposes cannot exceed 15% of gross proceeds or Rs 10 crore, whichever is lower, under the Securities and Exchange Board of India’s Issue of Capital and Disclosure Requirements regulations.

How far do Dove Soft collections lag listed peers?

Dove Soft’s consolidated receivables days were 150 in the year ended March 31, 2026, compared with 76 days at Route Mobile and 75 days at Tanla Platform. Receivables days measure the collection period using average trade receivables and net credit sales. Dove Soft’s trade-receivables turnover ratio was 2.44 times, compared with 4.80 times for Route Mobile and 4.84 times for Tanla Platform.

The difference was present in each of the three disclosed periods. Dove Soft recorded 151 receivables days in the year ended March 31, 2025 and 145 days in the year ended March 31, 2024. Its 150-day FY2026 cycle was one day lower than FY2025, but 74 days longer than Route Mobile’s and 75 days longer than Tanla Platform’s.

Dove Soft attributes its collection period to enterprise-client acquisition and extended credit terms for customers in telecom, banking, financial services and insurance, e-commerce, retail, and food and beverages. Its recurring service agreements are billed by usage across short message service, WhatsApp, rich communication services, voice and email rather than through fixed work orders.

What has widened Dove Soft’s cash-flow mismatch?

Dove Soft’s cash-flow mismatch widened because its standalone receivable holding period increased while its payable holding period declined. Under the company’s working-capital assumptions, receivable days rose from 135 at March 31, 2024 to 143 at March 31, 2025 and 146 at March 31, 2026. Payable days fell from 108 to 79 and then 66 over the same dates, creating an 80-day gap in the FY2026 assumptions.

Standalone trade receivables reached Rs 100.9939 crore at March 31, 2026, from Rs 69.3485 crore a year earlier and Rs 53.538 crore at March 31, 2024. Standalone revenue from operations rose to Rs 212.9005 crore in FY2026 from Rs 156.5996 crore in FY2025 and Rs 98.0145 crore in FY2024. Receivables equalled 47.43% of FY2026 revenue, compared with 44.28% in FY2025 and 54.62% in FY2024.

Trade payables were Rs 43 crore at March 31, 2026, compared with Rs 21.5562 crore at March 31, 2025 and Rs 34.0718 crore at March 31, 2024. Dove Soft says it is moving from channel partners toward direct procurement from telecom operators. The prospectus says telecom operators generally offer shorter credit periods without financial guarantees or collateral, while the company’s projected direct-procurement payment cycle is 30 to 60 days.

Can the proposed funding cover Dove Soft’s working-capital gap?

The proposed funding can add liquidity, but its effect depends on Dove Soft achieving projected collections and vendor arrangements. Net working capital, defined as current assets less current liabilities, was Rs 58.6307 crore at March 31, 2026, up from Rs 49.3929 crore at March 31, 2025 and Rs 17.8061 crore at March 31, 2024. Borrowings funded Rs 6.2858 crore of the FY2026 amount, with internal accruals funding Rs 52.3449 crore.

Dove Soft projects net working capital of Rs 86.3718 crore at March 31, 2027 and Rs 113.754 crore at March 31, 2028. The projections assume receivable days reduce to 142 and 137, respectively, but payable days also reduce to 62 and 51. The plan therefore requires customer collections to improve while suppliers are paid sooner, rather than relying on the longer channel-partner credit available in FY2024.

Dove Soft says the Rs 46 crore working-capital infusion is expected to support direct telecom-operator procurement, including bank guarantees, competitive bulk pricing and shorter payment cycles. The company currently does not provide financial guarantees, which it says results in higher bulk-purchase costs and shorter vendor credit. Its funding requirements and deployment plan have not been appraised by a bank, financial institution or independent agency.

What assumptions support Dove Soft’s projections?

Dove Soft’s projections rely on revenue growth, cross-selling to existing enterprise customers and regional expansion. Revenue from operations is projected at Rs 281.0499 crore in FY2027 and Rs 365.3649 crore in FY2028, after Rs 212.9005 crore in FY2026. Trade receivables are projected at Rs 117.0276 crore and Rs 157.4503 crore, equal to 41.64% and 43.09% of projected revenue.

Dove Soft identifies WhatsApp bots, rich communication services templates and voice-automation tools as product rollouts that can increase operating volume and working-capital needs. Southern and eastern India currently contribute 1.51% of total revenue, and Dove Soft plans local offices and on-ground capabilities in those regions. The plan also includes additions to sales, client-services and software-development teams, plus collaboration with channel partners and telecom operators.

Conclusion

Dove Soft’s Rs 46 crore working-capital proposal addresses a documented timing gap between customer collections and supplier payments. Its 150-day consolidated FY2026 receivables cycle was roughly double the 75 to 76 days reported by the two named peers, while its standalone payable assumption had fallen to 66 days as procurement arrangements changed.

The disclosed next steps are deployment of Rs 22 crore in FY 2026-27 and Rs 24 crore in FY 2027-28, with full use targeted by September 30, 2027. The unresolved matter is whether Dove Soft can reduce receivable days to 142 and then 137 while payable days decline to 62 and 51, and secure the bank guarantees contemplated for direct telecom-operator procurement.