Cholamandalam Securities IPO report on Radiant Cash Management Services
Incorporated in 2005, Radiant Cash Management Services Limited is the market leader in retail cash management services for banks, financial institutions, and organized retail and e-commerce companies in India. The company offers a range of services under this segment consisting of collection and delivery of cash on behalf of our clients from the end user. The company's management is supported by a qualified and motivated pool of about 2,012 employees (as of July 31, 2022). The main objects of the Company are: To carry on the business of providing to Banks, Individuals, Commercial and Government Establishments, Cash/Cheques/DDs Pickup and Delivery Services, Cash Processing such as sorting for good and soiled currencies, notes, coins of various denominations, Overnight vaulting services for bulk cash and ATM cards, Cassettes & important documents, ATM Services, Handling of PIN mailers/drafts/cheque book delivery, providing strong rooms installed as per RBI guidelines. To carry on the business of management of electronic online and mobile financial and cash transactions and product management and development of intellectual property in the area of cash management. To carry on any business regarding cash management under Business Process Outsourcing. The company is one of the largest players in the RCM segment in terms of network locations or touch points served as of March 31, 2022.
Valuation and Outlook
RCML’s financial track record shows healthy growth in topline as well as initiatives taken to cross-sell value added services thereby increasing revenue earned per customer. The company’s asset-light leasing based model has proved to maintain healthy margins for the company, also the company’s ROE is improving on YoY basis. From a valuation point of view the company will trade at a PE of 26x but with higher than avg RONW. We give this IPO a recommendation of “SUBRCIBE WITH CAUTION”
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