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© Reuters.
Updater Services, a Chennai-based corporate facilities management and business support services provider, is poised to launch its initial public offering (IPO) on September 25, 2023. The IPO will consist of a fresh issuance of shares worth Rs 400 crore and an offer-for-sale (OFS) of 80 lakh equity shares by the promoter and investors. The company’s shares are slated for listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on October 9, 2023.
The OFS includes 40 lakh equity shares from Tangi Facility Solutions, the promoter, and another 40 lakh from India Business Excellence Fund – II and IIA. This figure has been reduced from an initial indication of 1.33 crore shares in the draft red herring prospectus (DRHP), to 1.09 crore in the DRHP addendum, before finally settling at 80 lakh shares in the red herring prospectus (RHP).
The net proceeds from the fresh issue are earmarked for several purposes, including repaying debts worth Rs 133 crore, meeting working capital needs of Rs 115 crore (INR100 crore = approx. $12 million), funding inorganic initiatives costing Rs 80 crore, and for general corporate purposes.
Operating nationwide, Updater Services is considered the second-largest player in India’s integrated facilities management market. For this IPO, the company has allocated up to 75% for qualified institutional buyers, with high net-worth individuals receiving a 15% share and retail investors receiving the remaining 10%.
In addition to its primary services, Updater Services also offers a variety of business support services through its subsidiaries. These include audit and assurance services through Matrix; sales enablement services via Denave and Athena; and mailroom management services through Avon.
For the year ending March FY23, Updater Services reported a net profit of Rs 34.6 crore, a nearly 40% drop compared to the previous year due to weak operating performance. In contrast, its revenue, inclusive of finance income, increased by 41.3% to Rs 2,104.9 crore in the same period.
The company’s equity ownership is divided between the promoters, who hold 80.58% of the shares, and public shareholders, including India Business Excellence Fund II and India Business Excellence Fund II A, who own the remaining 19.43%.
The basis of allotment of IPO shares will be finalized in consultation with BSE by October 4, 2023. Successful investors are expected to receive their shares by October 6, while refunds or unblocking of funds for unsuccessful investors will occur by October 5.
IIFL Securities, Motilal Oswal (NS:) Investment Advisors, and SBI (NS:) Capital Markets are serving as the merchant bankers for the issue.
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