Radiant Cash Management Services IPO: All You Need To Know
Radiant Cash Management Services will launch its IPO on Dec. 23, priced between Rs 93 and Rs 99 per share.
Radiant Cash Management Services Ltd. will launch its initial public offering between Dec. 23 and Dec. 27.
The retail cash management provider will have an issue size of Rs 387.9 crore, consisting of a fresh issue of Rs 60 crore and a Rs 327.9 crore offer for sale by promoters and other investors. The OFS of 3.31 crore shares was offered by the promoter group, selling at a price band of Rs 94–99 apiece in the IPO.
The issue comprises 30.87% of the post-issue equity share capital of the company. The promoter will continue to hold a majority stake of 53.20% post-issue.
IPO Details
Duration: Dec. 23 to Dec. 27.
Fresh Issue: Rs 60 crore.
Offer for sale: Rs 327.9 crore.
Price band: Rs 94–99 per share.
Issue size: Rs 387.9 crore.
Face value: Rs 1 apiece.
Lot size: 150 shares and multiples.
Listing on: BSE and NSE.
Lead managers: IIFL Securities, Motilal Oswal Investment Advisors Ltd., and Yes Securities.
Use Of Proceeds
Funding working capital requirements: Rs 20 crore.
Funding of capex requirements for the purchase of specially fabricated armoured vans: Rs 25.48 crore.
Business
The company is an integrated cash logistics player with a leading presence in the retail cash management segment.
It provides services across 13,044 pin codes in India, covering all districts except Lakshadweep, with around 55,513 touch points and serving more than 5,388 locations, as on July 31, 2022.
Its marquee clients include some of the largest foreign, private, and public sector banks like Deutsche Bank AG, Standard Chartered Plc., and ICICI Bank Ltd., among others.
The end users of the services include some of the largest e-commerce companies, retail chains, non-banking finance companies, insurance firms, e-commerce logistics players, railways, and retail petroleum distribution outlets.
For the four months ended July 31, its total annual currency movement, or the total value of the currency passing through its retail cash management business, stood at Rs 48,585 crore.
It runs businesses in five different areas: cash pick-up and delivery, network currency management, cash processing, cash vans or cash in transit, and other value-added services. It gets nearly 67% from fixed-point cash pick-up and 24% from network currency management.
Financials
The company posted an Ebitda margin of around 25% in the first quarter of FY23.
Peer Comparison
The company competes with SIS Ltd. and CMS Info Systems Ltd. in the domestic market.
Risk Factors
Its business is highly dependent on the Indian banking sector to generate revenues, and any adverse development with respect to Indian banks that affects their utilisation of and demand for cash management services could have an adverse effect on business.
It derives a substantial portion of its revenue from a limited number of customers. If one or more of its key customers were to suffer a deterioration in their business, cease doing business with it, or substantially reduce their dealings with the company, its revenues could decline.
A decrease in the availability or use of cash as the predominant mode of payment in India could have an adverse effect on business.
Its business has significant expenses in relation to employee benefits. Any material increase in any of those expenses could affect the ability to competitively price services and maintain or increase profitability.
If it does not continue to invest in new technologies and equipment, its technologies and equipment may become obsolete, and its costs may increase relative to its competitors.
It is exposed to various security risks that may originate from within the company, which could have an adverse effect on its reputation, business, results of operations, and financial condition.
Watch IPO Adda with Radiant Cash Management Services:
