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AGS Transact Technologies IPO opens on Wednesday: 10 key things to know about the company

AGS Transact Technologies Ltd. claims to be one of the largest integrated omni-channel payment solutions providers in India, offering digital and cash-based solutions to banks and corporate clients.

January 18, 2022 / 03:53 PM IST
AGS Transact Technologies IPO

AGS Transact Technologies IPO

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AGS Transact Technologies will become the first Indian company to seek a listing on the stock markets this year through an initial public offering that opens on Wednesday. The IPO follows a month’s lull in the primary market.

Here are 10 key things to know before subscribing to the offer:

1) IPO Dates

The public issue will open for subscription on January 19, and will close on January 21. Anchor investors’ book, if any, will open for a day on January 18.

2) Price Band

The price band for the offer has been fixed at Rs 166-175 per share.

3) Offer Details

The company plans to raise Rs 680 crore through its public issue. This is entirely an offer for sale by shareholders including promoter Ravi B. Goyal, who will sell shares worth Rs 677.58 crore.

Among others, VC Gupte, Shailesh Shetty, Rakesh Kumar, Nikhil Patiyat and Rajesh Harshedrai Shah will sell the remaining Rs 2.42 crore worth of shares.

4) Objectives of the share sale

The company will not receive any money from the public offer as all the money will go to selling shareholders.

Also read - Adani Wilmar cuts IPO size to Rs 3,600 crore 

5) Lot Size and Investors' Reserved Portion

Investors can bid for a minimum of 85 equity shares and in multiples of 85 shares thereafter. As a result, retail investors can make a minimum investment of Rs 14,875 per lot, and the maximum investment would be Rs 1,93,375 for 13 lots as they are allowed to invest up to Rs 2 lakh in the IPO.

Half the offering is reserved for qualified institutional buyers, 35 percent for retail investors, and the remaining 15 percent for non-institutional investors.

Also read: IPO greenlight for Delhivery, Radiant Cash Management and Veranda Learning 

6) Company Profile

AGS Transact provides customised products and services comprising automated teller machines (ATMs) and cash recycler machines, outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets.

As of March 31, 2021, it was the second largest company in India in terms of revenue from ATM managed services under the outsourcing model, and revenue from cash management and number of ATMs replenished. As of August 31, 2021, it deployed 221,066 payment terminals and was one of the largest deployers of point-of-sale terminals at petroleum outlets in India.

As of August 31, 2021, it had approximately 50 banking customers, including ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd.

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 7) Financials

AGS Transact clocked lower profit at Rs 54.79 crore in the financial year 2021, down from Rs 83.01 crore in the previous year. Revenue declined marginally to Rs 1,758.94 crore from Rs 1,800.44 crore in the same period.

In the five months ended August 31, 2021, it reported a loss of Rs 18.1 crore on revenue of Rs 753.4 crore. Its overall earnings were impaired partly by the COVID-19 pandemic-led lockdowns.

8) Promoters and Management

Ravi B Goyal and Vineha Enterprises are the promoters of the company, having a 97.45 percent shareholding. Ravi B Goyal and his wife Anupama R Goyal hold a 100 percent equity stake in Vineha Enterprises.

Ravi B Goyal is the chairman and managing Director of the company. Anupama R Goyal is a non-independent and non-executive director on the board.

Sudip Bandyopadhyay, Vijay Chugh, Rahul Narain Bhagat, and Subrata Kumar Mitra are the independent and non-executive directors. Stanley Johnson P, and Vinayak R Goyal are the executive directors on the board. Saurabh Lal is the Chief Financial Officer of the company and of its subsidiary Securevalue India Ltd.

9) Risks and Concerns

Swastika Investmart has highlighted some risks and concerns that investors have to consider before subscribing to the issue:

  1. a) COVID-19 has had, and may continue to have some adverse effect on the company’s business.
    b) A small number of clients account for a large amount of its revenue.
    c) A decrease in the use of cash as a mode of payment could have an adverse effect on its business.
    d) Engaged in fee-based activities, its financial performance may be adversely affected by an inability to generate income from such business.
    e) The Reserve Bank of India and other authorities heavily regulate the sectors in which the company operates.

10) Grey Market Premium, Allotment, Refunds and Listing Dates

AGS Transact Technologies shares were available at a premium of Rs 20-21 in the grey market, i.e. a price of Rs 195-196 per share against the upper price band of Rs 175 per share, as per IPO Watch and IPO Central.

After closing the public issue on January 21, the company will finalise the IPO share allotment by January 27 and will initiate refunds of money to unsuccessful investors by January 28. Equity shares will get credited to the demat accounts of eligible investors by January 31.

Trading in equity shares will commence with effect from February 1 on the BSE and National Stock Exchange.

ICICI Securities, HDFC Bank, JM Financial are the book running lead managers to the issue.
Moneycontrol News
first published: Jan 18, 2022 03:53 pm