Updater Services IPO: Subscriptions Open Today; Here Are Key Factors To Know Before Bidding

The second largest player in the IFM market, Updater Services is launching its initial public offering (IPO) on September 25 to raise Rs 640 crore in a mixture of fresh issues and offer for sale (OFS). Subscriptions will be available till September 27, 2023. Ahead of the IPO, the company raised a whopping Rs 288 crore from 18 anchor investors at the upper price band.

The proposed equity shares in the IPO are set to list on exchanges BSE and NSE.

The IPO includes a fresh issue worth Rs 400 crore, and an offer for sale of up to 80 lakh equity shares. Overall, the IPO size is around Rs 640 crore. The IPO will be available from September 25th to 27th.

Under the offer for sale, shareholders such as Tangi Facility Solutions, India Business Excellence Fund - II, and India Business Excellence Fund - IIA will be offloading a portion of their stake in the company.

From the total size, 75% of the issue will be reserved for qualified institutional buyers (QIBs), while 15% will be allocated to non-institutional investors (NIIs) and the rest 10% will be kept for retail individual investors (RIIs).

The price band for the 100% book building is set at Rs 280 to Rs 300 per share having a face value of Rs 10 each. The bid lot size is 50 Equity Shares and in multiples thereof.

Proceeds from the fresh issue will be utilised for the following --- Rs 133 crore for repayment of certain borrowings, Rs 115 crore for working capital requirements, and Rs 80 crore for pursuing inorganic initiatives. A portion of the proceeds will also be used for general corporate purposes.

Book-running lead managers of the IPO are IIFL Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets. Link Intime India is the registrar of the IPO.

Ahead of the IPO, on September 22, Updater Services allotted 96,00,000 equity shares at the upper price band of Rs 300 per share to 18 anchor investors and raised Rs 288 crore. Anchor Book included marquee Domestic Institutional Investors such as ICICI Prudential, BNP Paribas, Aditya Birla Sunlife, Motilal Oswal etc. and Foreign Institutional Investors such as Copthall Mauritius, Franklin India, Societe Generale, CitiGroup Global Market and Nomura Singapore.

After the IPO, the allotment of shares is expected to take place on October 4, followed by initiation of refunds on October 5, and credit of shares in the demat account on October 6. As per Chittorgarh, the listing is expected on October 9.

Updater is among the leading, focused, and integrated business services platforms in India offering integrated facilities management ("IFM") services and business support services ("BSS") to its customers, with a pan-India presence. The company is the second largest player in the IFM market in India and has the widest service offering in the industry, making it a unique and differentiated player in the market.

In the BSS segment, the company offers Audit and Assurance services through its Subsidiary, Matrix.

In FY23, the company's net profit stood at Rs 34.6 crore as against Rs 57.37 crore in FY22 and Rs 47.56 crore in FY21. Revenue from contracts with customers stood at Rs 2,098.9 crore in FY23 compared to Rs 1,483.55 crore in FY22 and Rs 1,210.03 crore in FY21. Net worth also increased to Rs 380.89 crore in FY23 as against Rs 340.43 crore in FY22 and Rs 285.26 crore in FY21.