|Issue Opens on||Jan 19, 2022|
|Issue Close on||Jan 21, 2022|
|Total IPO size (cr)||680.00|
|Offer For Sale (cr)||680.00|
|Price Band (INR)||166-175|
|Face Value (INR)||10|
|Listing On||NSE, BSE|
Objects of the issue
- To carry out an offer for sale.
- To achieve the benefits of listing
|Issue Break-up (%)|
|Shareholding (No. of Shares)|
|Finalisation of Basis of Allotment||27-01-2022|
|Refunds/Unblocking ASBA Fund||28-01-2022|
|Credit of equity shares to DP A/c||31-01-2022|
Incorporated in 2002, AGS Transact Technologies Ltd was one of the largest integrated Omni-channel payment solutions providers in India in terms of providing digital and cash-based solutions to banks and corporate clients, as of March 31, 2021.
The company provide customized products and services comprising ATM and CRM outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets.
The company operate its business in three major segments: Payment Solutions; Banking Automation Solutions; and other Automation Solutions (for customers in the retail, petroleum, and colour sectors).
- It is the second-largest company in India in terms of revenue from ATM managed services and also the largest deployer of POS terminals at petroleum outlets in India.
- It not just serves the Indian market but has also expanded internationally in other Asian countries including Sri Lanka, Cambodia, Singapore, Indonesia, and the Philippines.
- As of August 31, 2021, it had approximately 50 banking customers, including ICICI Bank Limited, HDFC Bank Limited and Axis Bank Limited.
- The company’s colour operations primarily comprise the supply of automatic paint dispensers and related services, and serve customers including Asian Paints Limited, Kansai Nerolac Paints Limited and Berger Paints India Limited.
- As of August 31, 2021, it had installed a network of 221,066 merchant POS, 17,924 petroleum outlets, 72,000 ATMs and CRMs offering cash management services, 46,800 cash billing terminals, and installed 88,521 colour dispensing machines.
The business serves customers in 2200 cities and towns through 446,000 machines or customer touchpoints.
Outlook & Valuation:
The company’s revenue has been flat over the last three years, mostly on the declining side where revenue in FY21 fell to Rs 1,797 cr from Rs 1,833 cr in FY20.
The company’s profit, on the other hand, has been decreasing. The company’s profit fell from Rs 83 cr in FY20 to Rs 54.7 cr in FY21.
The company’s margin also shrank. The company is one of India’s leading Omni-channel payment solution providers with a strong network.
However, the government’s focus on digital payments will further decrease the use and availability of cash can have an adverse effect on business activities.
The IPO is priced at a PE of 38x and P/BV of 3.71x on the NAV of Rs 47.11, which is slightly higher than its listed peers however, they are not comparable on an apple-to-apple basis, also the IPO is purely OFS based. Thus we assign an “AVOID” rating to the IPO.
AGS TRANSACT TECHNOLOGIES LTD
KEY MANAGERIAL PERSONNEL
Mr Ravi B. Goyal is the Chairman and Managing Director of the Company.
He is responsible for the management of the overall operations of the company and its subsidiaries. He has approximately 26 years of experience in the field of technology.
- Mr Stanley Johnson P is an Executive Director on the Board of the Company. He has been instrumental in strengthening and expanding the company’s banking outsourcing operations across India.
- Mr Vinayak R. Goyal is an Executive Director on the Board of the Company. He works closely with management to drive strategic and business initiatives for the Company.
- Mr SaurabhLal is the Chief Financial Officer of the Company and of its Subsidiary, SVIL. He has over 15 years of experience in the financial service industry.
- Mrs Sneha Kadam is the Company Secretary and Compliance Officer of the Company and its Subsidiary, SVIL. She is an associate member of the Institute of Company Secretaries of India. She has over eight years of experience as a company secretary in Indian companies.
- Mr Ricardos El Khoury is the Chief Executive Officer and a director of its Subsidiary, Novus SGP. He has approximately 28 years of experience in the information technology sector.
- Mr Mehernosh Parekh is the Chief Operating Officer and a Director of its Subsidiary, SVIL. He holds a Bachelor of Commerce degree from theUniversity of Bombay. He has work experience in the cash management industry.
- An integrated omnichannel payment and cash solutions provider.
- Customer Driven Portfolio with Strong Capabilities to Develop Customized Solutions In-house.
- Diversified Product Portfolio, Customer Base, and Revenue Streams Leading to Cross-Selling Opportunities.
- Long-Standing Relationships with Technology Providers and Customers.
- Dedicated In-house Infrastructure and Technological Capabilities.
- Experienced Board of Directors and Senior Management.
- Focus on Growing of Digital Payment Solutions Business.
- Focus on Enhancing the Integrated Technology Payments Platform.
- Focus on Cash Management Services and international expansion.
- Covid -19 epidemic has had and may continue to have some adverse effects on their business.
- A small number of clients account for a large amount of their revenue.
- A decrease in the use of cash as a mode of payment could have an adverse effect on its business.
- Engaged in fee-based activities and their financial performance may be adversely affected by an inability to generate income from such activities.
- The RBI and other government authorities heavily regulate the sectors in which they operate.
AGS TRANSACT TECHNOLOGIES LTD
COMPARISON WITH LISTED INDUSTRY PEERS(AS OF 31st MARCH 2021)
There are no listed companies in India whose business portfolio is comparable with that of the company’s business and comparable to the scale of operations. Hence, it is not possible to provide an industry comparison.
FINANCIALS (RESTATED CONSOLIDATED)
|Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019|
|Equity Share Capital 1,185.81 1,185.81 1,185.81|
|Other Equity 4,400.81 3,803.74 3,063.53|
|Net Worth 5,586.62 4,989.55 4,249.34|
|Gross Debt 16,223.41 11,590.17 11,053.03|
|Revenue from Operations 17,589.44 18,004.43 18,057.42|
|EBITDA 4,767.60 4,954.61 4,428.75|
|Profit Before Tax 824.27 1,195.24 788.89|
|Net Profit for the year 547.92 830.14 661.94|
The information contained herein is strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”).
The contents of this document are for information purposes only.
This document is not investment advice and must not alone be taken as the basis for an investment decision.
Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of SME-IPO and various risks and uncertainties associated with the investment in the IPO of the Company.
All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position.
They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment.
The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document.
SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk.
The information contained in this document should not be construed as a forecast promise guarantee or assurance of any kind.
The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performance if any, are not indicative of future results. The actual returns on investment may be materially different from the past.
Investments in Securities market products and instruments included in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low-risk tolerance.
Such investments are subject to market risks including, without limitation, price, volatility liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.
Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with the preparation of the stock market research report.
Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report.
The compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusions from the information presented in this report.
The research entity has not been engaged in the market-making activity for the subject company.
The research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.
CORPORATE & ADMINISTRATIVE OFFICE – 48, Jaora Compound, M.Y.H. Road, Indore – 452 001 | Phone 0731 – 6644000
Compliance Officer: Ms Sheetal Duraphe Email: firstname.lastname@example.orgPhone: (0731) 6644 241
Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.