On Monday, Updater Services, a leading integrated facilities management firm in India, initiated its initial public offering (IPO) for subscription. The company aims to raise approximately Rs 640 crore ($85 million) through this IPO, which will remain open until Wednesday, September 27.
Prior to the launch of the IPO, Updater Services successfully raised approximately Rs 288 crore from anchor investors. The list of investors includes prominent financial institutions like BNP Paribas (OTC:BNPQY), Societe Generale (OTC:SCGLY), Citigroup (NYSE:C) Global Markets, and Nomura Singapore.
The structure of the company's IPO includes a fresh equity of Rs 400 crore and an offer for sale (OFS) of 80 lakh shares from the promoter and other selling shareholders. The price band for the shares has been set between Rs 280-300 per share, with a minimum bid of 50 shares in one lot and multiples thereafter.
The allocation of the IPO is divided into three categories: 75% for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 10% for retail investors.
Updater Services intends to use the net proceeds from the IPO for various purposes such as funding working capital requirements, repaying debt, pursuing inorganic initiatives, and other general corporate responsibilities.
The company has carved out a unique position in the market through its high-profile clients and operational efficiency. Its business model includes providing value-added services supported by cutting-edge technology. Despite this, some experts suggest that the asking price is aggressive given it stands at a P/E of 44.8x based on FY23 earnings attributed to the post-IPO fully diluted paid-up equity capital of the company.
In addition to its core business, Updater Services also provides employee background verification check services through Matrix. As of FY23, Matrix holds a market share of 5.4% in this segment.
For the year ended March 2023, Updater Services reported a significant 42% year-on-year (YoY) surge in its revenue from operations, reaching Rs 2,099 crore. However, the net profit for the same period saw a decline of 39%, settling at Rs 34.6 crore. The book-running lead managers for this issue are IIFL Securities, Motilal Oswal, and SBI Capital Markets, with Link Intime India serving as the registrar.
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