Mumbai-based Updater Services has fixed a price band of Rs 280-300 a share for its Rs 640-crore initial public offering (IPO), which opens for subscription on September 25.
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.
The initial OFS size was 1.33 crore shares, which was reduced to 1.09 crore in the addendum to the DRHP and was brought down further to 80 lakh shares in the red herring prospectus.
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Lot Size
The anchor book will be opened for a day on September 22, while the issue will close on September 27. Anchor investors are institutional investors or QIBs who are invited to subscribe to the shares before an IPO opens for subscription to shore up investor confidence.
The facility management services company has reserved 75 percent of the IPO for offer size for qualified institutional buyers, 15 percent for high networth individuals (non-institutional investors) and the remaining 10 percent for retail investors.
Investors can bid for a minimum of 50 shares and in multiples of 50 shares thereafter, which means the minimum application size for retail investors would be Rs 15,000 (50 shares) and their maximum investment would be Rs 1,95,000 (for 650 shares).
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Objectives of the IPO
The company that also provides business support services will use fresh issue proceeds to repay debt amounting to 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.
Its consolidated debt stood at Rs 176.54 crore as of March 2023.
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Earnings performance
Updater Services, which claims to be the second-largest player in the integrated facilities management market in India, recorded a net profit of Rs 34.6 crore for the year ended March FY23, declining nearly 40 percent compared to the previous financial year, affected by weak operating performance.
Revenue (including finance income) increased by 41.3 percent to Rs 2,104.9 crore during the same period.
The current shareholding of the promoters stands at 80.58 percent, while public shareholders hold 19.43 percent shares including India Business Excellence Funds II and II A.
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Listing Date
The finalisation of the allotment in consultation with BSE will take place by the end of October 4. Shares will be credited to the demat accounts of the successful investors by October 6.
The initiation of refunds or unblocking of funds from ASBA account for unsuccessful investors will be done by the end of October 5.
The shares will list on the BSE and the NSE on October 9, as per the IPO schedule.
The merchant bankers to the issue are IIFL Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets.
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