AGS Transact Technologies, an integrated omni-channel payment solutions provider, has seen a tepid debut on January 31 against its issue price of Rs 175 per share.
The listing price on the BSE was Rs 176.
The Rs 680-crore maiden public issue had seen a good demand from investors as the issue was subscribed 7.79 times during January 19-21, 2022. Non-institutional investors were at the forefront among investors as their portion saw a 25.61 times subscription, while the portion set aside for qualified institutional buyers and retail investors was subscribed 2.68 times and 3.08 times.
It was entirely an offer-for-sale issue by the promoter Ravi B Goyal, but indirectly the company will get those funds to reduce the debt burden as per the agreement between AGS and Goyal.
The price band for the offer was Rs 166-175 per share.
AGS Transact Technologies provides digital and cash-based solutions to banks and corporate clients. The company provides customised products and services comprising of ATM and CRM outsourcing, cash management and digital payment solutions, including merchant solutions, transaction processing services and mobile wallets.
Most analysts had assigned 'subscribe' rating to the issue of AGS given its diversified products and services portfolio, varied customer base and multiple revenue streams.
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"At a higher price band of Rs 175, AGS is demanding a P/E multiple of 38.5x (to its FY21 earning of Rs. 4.6), which is at premium to peer average of 21.8x. AGS' business operations were severely impacted from the COVID-19 pandemic restriction, thus its earnings was depressed in FY21," says Choice Broking.
It says that with the easing of pandemic restrictions, anticipating a ramp-up in ATM deployments by banks and further evolution in the digital payment space, the company is well placed to benefit from its diversified product and services portfolio, varied customer base and multiple revenue streams. Thus it had assigned a 'subscribe for long term' rating for the issue.
Hem Securities had also recommended subscribing the issue for the long term. "The company being omni-channel integrated payment and cash solutions provider has a customer-driven portfolio with strong capabilities to develop customised solutions in-house. The company has a diversified product portfolio, customer base and revenue streams leading to cross-selling opportunities has long-standing relationships with technology providers and customers," it reasoned.
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AGS Transact recorded a loss of Rs 18.1 crore on a revenue of Rs 753.4 crore for the five-month period ended on August 31. It had a profit of Rs 54.79 crore for the financial year 2021, down from Rs 83.01 crore in the previous year, and revenue also declined to Rs 1,758.94 crore from Rs 1,800.44 crore in the same period.
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