Updater Services IPO: 10 things to know before subscribing to Rs 640 crore issue

Ahead of the IPO, Updater Services raised Rs 288 crore from 18 anchor investors on September 22.

Updater Services’ Rs 640 crore IPO opened for subscription today. The public issue received a muted response on the first day of subscription with bids for 6.94 lakh shares against the IPO size of 1.19 crore shares, implying a total subscription of just 6%. Ahead of the IPO, the company raised Rs 288 crore from 18 anchor investors on September 22. The offer comprises of fresh issue of shares worth Rs 400 crore and and an offer-for-sale of Rs 240 crore.

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

1) IPO Dates

The IPO opened for subscription today i.e. September 25, 2023, and will close on September 27, 2023.

2) Price Band

The price band for the issue has been fixed at Rs 280-300.

3) Offer Details

Updater Services plans to raise Rs 640 crore via IPO. Ahead of the IPO, the company has raised Rs 288 crore from 18 anchor investors. Societe Generale, Copthall Mauritius Investment, Citigroup Global, BNP Paribas Arbitrage - ODI, Nomura Singapore, ICICI Prudential Mutual Fund, Franklin India, Aditya Birla Sun Life Insurance, Bandhan Mutual Fund, Motilal Oswal and 360 One Special Opportunities Fund participated in the anchor book.

4) Objectives of Issue

Updater Services will use fresh issue proceeds to repay debt totalling Rs 133 crore, working capital requirements of Rs 115 crore, and inorganic initiatives at a cost of Rs 80 crore. The remaining funds will be used for general corporate purposes.

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5) Lot Size

Investors can bid for a minimum of 50 equity shares and multiples of 50 after that. Hence the minimum investment by retail investors would be Rs 14,000 (50 (Lot size) x 280 (lower price band)). At the upper end, the bidding amount will increase to Rs 15,000.

6) Company Profile

Updater Services is the second-largest player in the integrated facilities management market in India. The company has the widest service offering in the industry, making it a unique and differentiated player in the market.

7) Financials

The company reported a net profit of Rs 34.6 crore for the year ended March 2023, which fell nearly 40 percent compared to the previous financial year, impacted by weak operating performance. However, the revenue (including finance income) increased by 41.3 percent to Rs 2,104.9 crore during the same period. Its consolidated debt stood at Rs 176.54 crore as of March 2023.

8) Merchant Bankers

Motilal Oswal Investment Advisors, IIFL Securities, and SBI Capital Markets are the lead managers for the Updater Services IPO, while Link Intime India is the registrar for this IPO.

9) Promoters

The IPO comprises a fresh issuance of shares worth Rs 400 crore and an offer-for-sale (OFS) of 80 lakh shares worth Rs 240 crore by three shareholders. Promoter Tangi Facility Solutions will be offloading 40 lakh shares and the remaining 40 lakh will be sold by India Business Excellence Funds II & IIA

10) Listing Date

Updater Services shares will be listed on the BSE and the NSE on October 9, according to the IPO schedule.