BLS E-Services IPO opens on Jan 30: 10 things to know before you buy into Rs 310-cr issue

2. Price Band

The price band for the issue has been fixed at Rs 129-135 per share.

3. Offer Details

BLS E-Services plans to raise Rs 310.91 crore through the IPO. The public offer is entirely a fresh issue of 2.3 crore shares. The company has reserved 23,03,000 equity shares for the shareholders of promoter BLS International Services. The eligible shareholders will get these shares at a discount of Rs 7 each to the final issue price.

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Up to 75 percent of the net issue is reserved for qualified institutional investors, 15 percent for non-institutional investors and the remaining 10 percent is kept for retail investors.

4. Objectives of Issue

The net proceeds from the fresh issue worth Rs 97.58 crore will be used for strengthening technology infrastructure to develop new capabilities and consolidating existing platforms and Rs 74.78 crore for funding initiatives for organic growth by setting up BLS stores. The company will also use Rs 28.71 crore to achieve inorganic growth through acquisitions. The remaining funds will be used for general corporate purposes.

5. Lot Size

Investors can bid for a minimum of 108 equity shares and multiples of 108 after that. Hence the minimum investment by retail investors would be Rs 13,932 (108 (Lot size) x 129 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,580.

6. Company Profile

BLS-E Services is a digital service provider that offers business correspondence services to major banks in India, assisted e-services and e-governance services at the grassroots level in India. As of September 2023, BC business contributed 66.05 percent to the total revenue from operations, e-governance contributed 28.34 percent and assisted e-services 5.61 percent.

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The company’s merchants are organised into two categories: BLS touchpoints and BLS stores. As of September 30, 2023, the company had 98,034 BLS touchpoints which includes 1,016 BLS stores. Starfin India, Zero Mass and BLS Kendras are the subsidiaries of the company.

7. Financials

In the fiscal year 2023, the revenue from operations rose 151 percent to Rs 243.06 crore compared to Rs 96.69 crore in FY22. Net profit surged 278.5 percent to Rs 20.22 crore in the same period. The company reported a return on equity (RoE) and return on capital employed (RoCE) of 33.33 percent and 30.62 percent, respectively, in FY23.

The company reported a net profit of Rs 14.68 crore on total revenue of Rs 158.04 crore for the period ended on September 30, 2023. Profit after tax (PAT) margin and earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin stood at 9.4 percent and 14.23 percent, respectively in H1FY24.

8. BRLMs & Promoters

The book-running lead manager of the IPO is Unistone Capital while Kfin Technologies is the registrar. BLS International Services, Diwakar Aggarwal and Shikhar Aggarwal are the promoters of the company.

9. Risks

(i) The company derives a substantial portion of revenue from a single customer, one of the largest  PSU banks. In the six months ended September 30, 2023, the largest customer accounted for 59.75 percent of revenue from operations.
(ii) The company provides e-governance services only in the states of Punjab, Uttar Pradesh and West Bengal. In the past Punjab state e-governance society terminated its master service agreement with the company.
(iii)  A substantial portion of the revenue is generated by BC business operated by subsidiaries ZMPL and Starfin for banking partners.

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10. Listing Date

The basis of allotment will be finalised by February 2, shares will be credited to demat accounts by February 5 and the stock will be listed on the NSE and BSE on February 6.