Digitide, Bluspring will carry shared heritage of Quess: Founder Ajit Isaac

Caption: (L-R) Ajit Isaac, Founder and Non-Executive Chairman, Digitide; Kamal Pal Hoda, Chief Financial Officer, Quess Corp Limited, Gurmeet Chahal, Chief Executive Officer, Digitide

Ajit Isaac, the founder and chairman of India's leading business services provider Quess Corp, was back on the podium at the Bombay Stock Exchange (BSE) after nine years, as he commenced the twin listing of demerged entities – IT and engineering services arm Digitide and infrastructure services business Bluspring.

With this, Isaac would become one of the few entrepreneurs to have founded three listed companies in his lifetime.

On ringing the bell, Digitide Solutions listed at Rs 245 per share and closed at Rs 232.75 per share, a 5 percent decline by the end of the market trading hours. Bluspring Solutions, that started trading at Rs 86.95 per share on BSE, closed at about 5.2 percent lower at Rs 82.65 per share.

Speaking at the listing ceremony, Isaac said, "Around nine years ago is when we listed Quess Corp, in the middle of July, we had an issue for about Rs 400 crore, which was oversubscribed 145 times. We listed here at a premium of almost 40%. We came back to markets about 13-14 months later and raised another Rs 870 crore. So combined, we raised about almost Rs 1,270 crore and that money we invested back into business."

"The investment that we raised from public markets is what led to Bluspring and Digitide," he shared, adding, "It's a terrific example of how public markets help enterprises like ours. We build a business, we take it to market, we get other investors in, raise more capital and then build surviving businesses. This is free enterprise at its best."

Isaac stated that post listing both the spin-off companies will have a lot of "flexibility and freedom", but they would also continue to carry the shared heritage of Quess.

"We think that shared heritage of Quess is very important as they go forward in their journey. We are only trustees of public money as we raise the capital," he said.

The strategy behind the business restructuring and demerging of these two entities is to unlock value from the individual companies. Digitide Solutions will be focusing on the fast-growing technology sector, while Bluspring Enterprises, will be aimed at core business services and consulting.

In the last 20 years, Quess Corp Group has grown from Rs 16-crore company to a business with annual revenue of $2 billion and more than five lakh employees.

What's next

Digitide, which already has a revenue of over $300 million, is aiming to reach $1 billion in revenue over the next five years. The company has a headcount of about 55,000 people and serves over 300 customers globally.

Isaac, in an earlier interview with Moneycontrol had said that the entity is expected to grow in the "mid-teens" annually and generate margins in the range of 12-15 percent.

"This is a steady business. It also demonstrates our capital allocation efficiency, we built two new platforms entirely from our IPO capital," he said.

Gurmeet Chahal, CEO, Digitide said that post listing, to achieve the set revenue target the company will need to increase the revenue three-fold. He will be focusing on growing three verticals in each geography.

"In India, we will focus on growing banking, financial services and insurance (BFSI), fast growth tech and manufacturing. In North America, the focus will be on BFSI, fast growth tech and healthcare. And additionally in service lines, the focus will be on digital engineering and application management, Data, analytics and AI, and businesses processes," Chahal told Moneycontrol on the sidelines of the listing ceremony.

He added, "We don't want to fix what's not broken. We continue to enhance our core. We are going to build some adjacencies around that and selectively embark on new frontiers."

Bluspring, meanwhile, is targeting a compound annual growth rate (CAGR) of 18–20 percent and aims to expand its operating margins from 4 percent to 6 percent over the next five years.

Bluspring will house six established service brands across facilities management, food, industrial maintenance, telecom infrastructure, and security. It will manage over 360 million square feet of space, serving 3 million meals per month, and overseeing 25 percent of India's telecom tower infrastructure.

At present, Bluspring services over 1,000 customers across 28 states of the country. It’s overall workforce stands at 85,000 plus.

"We're not starting from scratch, we’re standing on a foundation of scale, legacy, and domain expertise," Kamal Pal Hoda, Chief Executive Officer, Bluspring, told Moneycontrol.

Hoda added that Bluspring will pivot from traditional manpower-based contracts to outcome-driven and tech-integrated service models. The company will double down on deploying internet of things (IoT), automation, and artificial intelligence (AI).

Inorganic growth

Most importantly, a part of the funds raised by both the companies through the listing will be kept aside for acquisitions and special situations – an inorganic growth strategy that had played out well for Quess Corp’s history.

"We've completed 24 acquisitions in the last 7-10 years," Hoda said. "We'll continue to look for adjacencies, underutilised assets, and opportunities where we can add value at scale."