Staffing company Teamlease Services Ltd on Friday announced its plans to raise Rs.150 crore with its Initial Public Offer (IPO) opening on February 2 and closing on February 4.
"We are going for an IPO to get liquidity and institutionalising the company. A company listed on the stock exchange has more trust," said Teamlease managing director Ashok Reddy.
Teamlease is offering equity shares of face value of Rs.10 each for cash at a price band of Rs.785 to Rs.850 per share.
Along with the fresh issue, there is an offer for sale by Gaja Capital India Fund (GCIF) for 2,75,977 equity shares, Gaja Advisors Pvt Ltd (GAPL) for 76,660, GPE (India) Ltd for 11,80,569, India Advantage Fund (IAF) for 15,33,206 and HR Offshoring Ventures Pvt Ltd for 1,53,321.
Another 10,000 equity shares have been reserved for eligible employees and February 1 has been reserved as the offer period for anchor investors.
IDFC Securities, Credit Suisse Securities and ICICI Securities have been chosen as the Book Running Lead Managers (BRLM) for the IPO.
Teamlease finance controller Ramani Dathi said CRISIL Research gave a rating of 4/5 for the IPO.
"We will utilise up to Rs.80 crore from the proceeds for our working capital needs, Rs.25 crore for acquisitions, Rs.15 crore for expanding our IT infrastructure and others and the balance amount for the issue expenses," said Dathi.
Reddy, highlighting Teamlease is a cash positive and the first Indian staffing company going for an IPO, said: "There are thousands of fragmented players (staffing companies) in the country... we want to acquire those..."
According to him, Teamlease is clocking a return on investment of up to 40 percent compared to the average of 12 percent for global staffing companies.
"The growth rate is three to four percent annually for global staffing companies compared to 25 percent for Teamlease," said Reddy.
The company will achieve a market capitalization of Rs.1,350 crore after IPO while the promoter shareholding will fall below 50 percent from the current 51 percent, Reddy said.
Expressing confidence on the performance of the company, he said, "If we can maintain the current five to six percent growth rate, we can be the largest staffing company in the world."
