 "BLS E-Services IPO sails through on Day 1: Here's all you need to know")
BLS E-Services maiden public share sale opened for subscription on Tuesday, January 30. The company aims to raise up to Rs 311 crore by way of issue of 2.30 crore fresh equity shares in the price band of Rs 129 - Rs 135.
The IPO has got-off to a strong start, with significant demand from retail investors. As of 11:30 AM, the issue had received bids up to 2.5 times the IPO size, with retail portion subscribed nearly 11 times. The non-institutional investors segment has also seen steady demand and was subscribed up to 3.5 times.
The heavy demand at the IPO can be attributed to the buzz in off-market trades. According to IPOWatch, the stock quotes a premium of up to Rs 150 in the grey market.
Here are the brief details of the IPO
Price Band: Rs 129 - Rs 135
Lot Size: 108
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Issue closes: February 01
Post share sale, the promoters holding in the company will be declining from 92.3 per cent to 68.9 per cent.
As per the draft prospectus filed by BLS E Services the objective of the IPO is for strengthening the technology infrastructure to develop new capabilities and consolidating the existing platforms.
That apart, the company plans to issue proceeds from the share sale towards funding initiatives for organic growth by setting up new BLS stores, and through acquisitions.
BLS E-Services is a technology-enabled digital service provider, providing (i) Business Correspondents, e-assisted and e-governance services to banks in India. The company provides access points for delivery of essential public utility services, social welfare schemes, healthcare, financial, educational, and agricultural among others.
That apart, the company has an extensive network of around 98,034 BLS touch points and 1,016 BLS stores. The company generates revenue under these segments by way of registration fees and transaction-based commission on goods & services.
For the first half of FY24 so far, the company reported a net profit of Rs 207.70 crore. In comparison, the company had posted a net profit of Rs 269.80 crore, Rs 67.80 crore and Rs 39.20 crore in FY23, FY22 and FY21, respectively.
Revenue from operations in FY24 as of September 2023 end stood at Rs 1,561.70 crore as against Rs 2,430.60 crore for the entire financial year 2022-23.
Brokerage firm, Anand Rathi in its note has recommended a 'SUBSCRIBE - Long-Term' rating to the IPO, as it believes that valuations of the company are fairly priced.
At the upper end of the price band, the company is valued at P/E of 60.0x, with a market cap of Rs 1,226.50 crore post issue of equity shares and return on capital employed of 30.62 per cent, the note stated.