Updater Services IPO to debut on September 25, fresh issue component at Rs 400 crore

The company's equity shares will be listed on the BSE and NSE on October 9, as per the IPO schedule.

Chennai-based Updater Services will be opening its initial public offering on September 25, comprising fresh issuance of shares worth Rs 400 crore and an offer-for-sale (OFS) of 80 lakh equity shares by promoter and investors. The anchor book will be launched for a day on September 22, while the public issue will close on September 27. Promoter Tangi Facility Solutions will be selling 40 lakh equity shares via OFS, and the remaining 40 lakh shares will be sold by India Business Excellence Fund – II and IIA.

The OFS size has been further reduced from 1.33 crore mentioned in the DRHP (draft red herring prospectus), to 1.09 crore in the addendum to the DRHP before finally settling to to 80 lakh shares in the RHP (red herring prospectus).

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With a pan-India presence, the facilities management and business support services provider will utilise net fresh issue proceeds for repaying debts 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.

As of March 2023, its total consolidated borrowings amounted to Rs 176.54 crore.

The company, which claimed to be the second-largest player in the integrated facilities management market in India, has reserved up to 75 percent of the IPO portion for qualified institutional buyers, 15 percent for high networth individuals, and the remaining 10 percent for retail investors.

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Within the business support services segment, it offers audit and assurance services through its subsidiary, Matrix. Further, it provides sales enablement services through subsidiaries Denave and Athena, while the company offers mailroom management services through another subsidiary, Avon.

The financials

On the financial front, it reported a net profit at Rs 34.6 crore for the year ended March FY23, falling nearly 40 percent compared to the previous year, impacted by weak operating performance. However, the company's revenue (including finance income) grew by 41.3 percent to Rs 2,104.9 crore during the same period.

Promoters hold 80.58 percent shareholding in the company and public shareholders, including India Business Excellence Fund II and India Business Excellence Fund II A, own the remaining 19.43 percent shares.

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The company, in consultation with the designated stock exchange BSE, will finalise the basis of allotment of IPO shares by the end of October 4, and the successful investors will get their shares by October 6, while the initiation of refunds (if any for anchor investors) or unblocking of funds from ASBA account for unsuccessful investors will take place by the end of October 5.

Its equity shares will be listed on the BSE and NSE on October 9, as per the IPO schedule.

IIFL Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets are the merchant bankers for the issue.