CIEL Group to raise Rs 150-200 crore in FY23-24 to fund acquisition plans

Staffing solutions provider CIEL Group has planned to raise Rs 150 crore to Rs 200 crore this financial year to fund its acquisition plans, a top official said here on Wednesday.

The funds raised would be deployed for the current acquisition targets of seven companies mainly in the professional staffing segment and human resource technology domain, among others, Ma Foi and CIEL Group executive chairperson K Pandiarajan told reporters here.

The city-based company recorded revenue of Rs 815 crore in FY 2022-23, a 57 per cent increase on Rs the 520 crore revenue recorded in 2021-22.

"We are planning to infuse around Rs 150 crore to Rs 200 crore through private equity and we have retained one of the most respected investment bankers for the purpose," Pandiarajan said.

"Out of the seven companies, we believe four will be acquired during this year and we intend to deploy the funds for this purpose. We will also deploy a significant part of the funds towards strengthening the digital properties," he said, responding to a query.

Pandiarajan also said that the funds raised would also be used by the company to hit the capital market by the end of the financial year. "Our hope is to file the Draft Red Herring Prospectus (DRHP) by the last quarter of this financial year. Depending on the speed of SEBI for clearance, we could go for the public issue," he said.

On the performance of the company in the past fiscal year, Pandiarajan, who is also the director of the Ma Foi and CIEL Group, said the company managed to grow three times more than the market growth of 16 percent. "We believe we have grown at 57 per cent."

In the financial year 2022-23, Pandiarajan said, "the company raised Rs 25.7 crore as private placement investments from companies like Zoho, BharatMatrimony, CavinKare, Kaleeswari and about 50 HNIs".

We have also acquired three companies in the past few months, he noted.

CIEL Group registered revenue of Rs 815 crore during the last financial year, up by 57 per cent from Rs 520 crore recorded in 2021-22. "We have recorded Rs 815 crore revenue while the EBITDA has grown to Rs 12.2 crore... The headcount has reached 25,744, which is 29 per cent growth over last year," he said.

Asked how much the company was planning to raise through IPO (Initial Public Offering), Pandiarajan said the promoters including himself hold 91 per cent stake in the company and "we intend not to dilute beyond 20 per cent at this stage of raising".

He said, "In the public issue, I believe we should raise at least Rs 750 crore...that is based on the valuation," he said.

CIEL HR Managing Director and CEO Aditya Narayan Mishra said, "The five unique digital interventions of CIEL Group helped its revenues grow by 57 per cent year on year while the industry grew by 16 per cent year on year (as per ISF report February 2023). The staffing and recruitment business of CIEL continues to be the largest business of the group."

He added, "FY24 will be a year of expanding horizons, as CIEL Group aims to disrupt the HR space further.