AGS Transact Technology IPO Review: Date, Price, GMP.

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KNOW THE COMPANY:

AGS Transact Technology is an Integrated Omni-Channel company involved in the business of Payment solutions. The company is engaged in providing cash and digital solutions. The company provides various customized services and products. The services provided by the Company are ATM, CRM also known as Cash Recycler Machine, digital payment, cash management and Solutions for the Merchant, Mobile Wallets and Transaction Processes. The company offers service to Banks, Financial Arms, NBFC’s, Paint Companies, Petroleum Companies, Retail, Fintech and Cash Management Companies. The company also offers service of automation and installation services. It includes help desk services, system integration, support and remote administration.

The company commenced their business operation by providing a banking automation service in 2004. Under this, it provides the service of ATM, provision of maintenance services and site development. The company, in 2009, started providing services of ATM outsourcing and transaction switching cash management services. The company provides these services through their subsidiary SVIL. Now, AGS is a company that provides end-to-end technology and payment solutions. Their subsidiary SVIL will also start up services for the expansion of the CRM business. It will enable to strengthen the company’s market presence and business opportunities.

The company holds charge of:

ATM and CRM72,000
Cash Management Assistance to ATM through their Subsidiary SVIL47,569
Merchant POS207,335
Cash Billing Terminals46,000
Colour Dispensing Machines85,700
Association with Petroleum Outlets16,700

OBJECTS OF THE IPO ISSUE:

  • Prepayment of all the loans of the company, which be availed on a consolidated basis. 
  • To meet corporate targets. 
  • To fund the working capital requirement.   

BASIS OF THE IPO OFFER:

  • The company is an Omni-Channel Cash Systems and Integrated Payment provider company.
  • The company provides Customer-focused services along with proper in-house customized, developing solutions.
  • The company has a diversified service and product portfolio with a huge base of customers and a stable revenue stream. It helps the Company in Cross-Selling.
  • The company has a long-term association with its clients and technology suppliers.
  • The company has the desired Technological and Infrastructure expertise for business operation.
  • The company has an excellent, experienced management, Board of Directors and Promoters.

AGS TRANSACT TECHNOLOGIES IPO:

AGS Transact Technologies Limited, a Payment solutions provider company, has its headquarters in Pune. The company submitted their DRHP to the SEBI. Currently, the company is waiting for approval from SEBI to float its IPO in the market. The IPO of the Company is around Rs.680 Crore. The company has brought forward the IPO is a pure OFS based IPO. The IPO – OFS is brought forward by the promoter of the company. The company in the past also planned up to raise funding through IPO back in 2018, 2015 and 2010. 

As per the DRHP Promoter of the Company, Ravi B Goyal will offload his stake from the Company worth Rs.672 Crore while the other selling stakeholders will sell their stake worth Rs.8 crore. 

IPO Opening DateJanuary 19, 2022
IPO Closing DateJanuary 22, 2022
Issue TypeBook Building Type
Face ValueRs.10/ Equity Share
IPO PriceRs.166 – Rs.175 per equity share
Market Lot1 lot corresponding to 85 shares
Minimum Order Quantity85 equity shares
Minimum Cut-off AmountRs.14,875
Maximum Lots13 lots
Maximum Order Quantity13 lots corresponding to 1105 equity shares
Maximum Cut-off AmountRs. 193,375
Listing AtBSE, NSE
Issue SizeRs.800 Crore
Fresh Issue0
Offer for SaleRs.800 Crore
Basis of Allotment DateJanuary 27, 2022
Initiation of RefundsJanuary 28, 2022
Credit of Shares to Demat AccountJanuary 31, 2022
IPO Listing DateFebruary 22, 2022
Basis of Allotment Type% Of the IPO Offer
Qualified Institutional Buyer50
Non-Institutional Investor15
Retail35

FINANCIAL TREND:

   Core EBITDA Margin (%)24.8725.62-2.92
   EBIT Margin (%)12.3113.90-11.39
   Pre-Tax Margin (%)4.776.67-28.54
   PAT Margin (%)3.204.65-31.16
   Cash Profit Margin (%)17.9318.21-1.54
   ROA (%)2.244.51-50.45
   ROE (%)10.9318.86-42.05
   ROCE (%)14.6221.97-33.43
   Asset Turnover(x)0.700.97-28.02
   Sales/Fixed Asset(x)1.081.52-29.04
   Working Capital/Sales(x)3.65-10.74133.95
   Fixed Capital/Sales(x)0.930.6640.93
   Receivable days98.0283.2317.78
   Inventory Days14.0720.15-30.19
   Payable days80.4072.3311.15
   Net Sales Growth (%)-2.3021.54-110.70
   Core EBITDA Growth (%)-3.77125.80-103.00
   EBIT Growth (%)-13.43135.44-109.92
   PAT Growth (%)-32.751227.08-102.67
   EPS Growth (%)-34.001212.49-102.80
   Total Debt/Equity(x)2.261.3962.48
   Current Ratio(x)1.400.8468.03
   Quick Ratio(x)1.340.7773.78
   Interest Cover(x)1.631.92-15.16
 
ParticularsFor the year ending with Crore
31-Mar-2131-Mar-2031-Mar-19
Total Assets2,913.832,241.402,054.43
Total Revenue1,797.151,833.531,823.63
Profit After Tax54.7983.0166.19

WEAKNESS AND THREATS:

  • The COVID-19 has hit the company badly by adverse effects on the company.
  • The company’s large amount of revenue comes up from small clients. 
  • The company is also engaged in fee-based business activity, and in case they couldn’t acquire income from these operations, it will contrarily affect the business. 
  • The company is engaged in the business where the RBI, GoI, regulates them. As a result, the company needs to follow strict guidelines and regulations.
  • The company, its directors, promoters and their subsidiary are currently under trial for a legal procedure.
  • Any alterations in trade charges made by the NPCI, regardless of whether of planned guideline changes or in any case, may hurt the company’s business operation.
  • The company can also face challenges of running and keeping up with the ATM and CRM being provided to them on a rental basis. It could affect the business operation of the company.
  • The company is engaged in a business that has a high working capital requirement.
  • The company can also negatively affect the slowdown of ATMs and the risk of expansion of Digital Transaction.
  • Any instalment deferral or default by a customer will negatively impact the reputation of the company’s productivity. 
  • The company can also face challenges setting up the ATM and CRM in places where the infrastructure facility is weak.
  • The company’s financial arrangements incorporate variable-rate revenue, and any increases may adversely affect their business.
  • The company has registered a Decline in revenues along with the operating profitability margins.
  • The company has registered a Delay in their equity infusion due to its Highly Intensive CAPEX plan.

STRENGTHS AND GROWTH:

  • The company has a strong market share with a wide presence across the system value chain.
  • The company stated that it plans to expand its Business of Digital Payment Solutions in the coming years. The company aims to generate 15% more revenue from this segment.
  • The company has also started an initiative to shift to Payments-as-a-Convenience from Payments-as-a-Service operation model through Ongo Card and Ecosystem.
  • The company has also aimed to maintain stability with expansion in their core business of Outsourcing of Managed Services, ATM and CRM.
  • The company holds good visibility through revenues due to a long-term relationship with its clients.
  • The company has increased their presence in the vertical of digital payment. It will enable the company to diversify its revenue and face the challenges of the Growth of Digital Transactions.
  • The company also aims to expand their business operation on the international level.
  • AGS is the second-largest company in the country, which generates revenue from ATMs, CRM and other managed services. It carries out the operation by outsourcing its business.
  • The company was the first company to use IPS with OMCs. It contributes a major part of their Revenue and Profitability matrix.
  • The company has a strong financial profile with a solid track record on financial and operational upfront.
  • It is the largest deployer of the POS at petroleum outlets in the country.
  • The company has registered an improving performance upfront in its financial and operational level across all its business divisions.
  • The company has adequate Liquidity that is supported by its steady annual net accruals of cash. The company has a high cushion in their cash flows from their business operation. It helps them to raise additional long-term funds.
  • The company has efficient working capital management. It led to the improvement of the working capital structure, Debt/EBITDA margins of the company.
  • The company has a strong client base that incorporates Reputed Companies as their clients from all the verticals of their business operation:
BANKS and Payment SolutionsAxis Bank, ICICI Bank, HDFC Bank, Federal Bank
RETAILKansai Nerolac Paints, Berger Paints India
Petroleum IndustryHPCL, BPCL, IOCL

PROMOTERS:

The promoters of the company are:

  • Ravi B. Goyal
  • Vineha Enterprises Private Limited.
Pre-Issue Share Holding97.61%
Post Issue Share Holding

CONTACT DETAILS:

AGS Transact Technologies Limited
601-602 Trade World, B Wing, Kamala Mill Compound,
Senapati Bapat Marg, Lower Parel,
Mumbai 400 013, Maharashtra, India
Tel: +91 22 6781 2000
E-mail: ipocompliance@agsindia.com
Website: www.agsindia.com

REGISTRAR:

Link Intime India Private Limited
C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli West,
Mumbai 400 083
Maharashtra, India
Tel: +91 22 4918 6200
E-mail: ags.ipo@linkintime.co.in
Website: www.linkintime.co.in

LEAD MANAGER(S):

  • HDFC Bank Limited
  • JM Financial Limited
  • ICICI Securities Limited
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