Updater Services IPO - Investment Rationale, Issue Details, Strengths, Financials, Risks: Anand Rathi

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Anand Rathi's IPO Report.Updater Services Ltd. will launch its initial public offering today and will be concluded on September 27. The integrated facility management services and business support services platform has fixed a price band of Rs 280 to Rs 300 per share. The minimum order quantity is 50.The 640 crore IPO will comprise of a fresh issue of equity shares aggregating up to Rs 400 crore and an offer for sale of up to 80 lakh equity shares aggregating to Rs 240 crore by a promoter and existing shareholders..Objects of the Issue Repayment and /or prepayment of certain borrowings availed by the company. Funding working capital requirements of the company.Pursuing inorganic initiativesGeneral corporate purposes.Strengths:Leading integrated business services platform, operating across diverse segmentsLongstanding relationship with customers across diverse sectors leading to recurring businessPan India presence with large and efficient workforce coupled with strong recruitment capabilitiesTechnology at the forefront of the current and future business.Valuation and outlook The company offers facility management services and business support services. Operating in the business-to-business segment, the company offers a wide spectrum of business services, which are broadly classified into the two following segments such as facility management and other services segment and BSS segment.At the upper price band company is valuing at price/earning of 57 times with a market cap of Rs 20,010 million post issue of equity shares and return on net worth of 9.4%. Through the marque clients, past acquisitions and operational efficiency, the company has successfully created a niche place in services. Moreover, company has aimed for high margin through value-added services with the support of latest technology in its portfolio. On the valuation front, we believe that the company is fairly priced. Thus, we recommend an 'Subscribe – Long Term' rating to the IPO..Key RisksUpdater Services has a large workforce deployed across workplaces and customer premises. Consequently, the company may be exposed to service-related claims and losses or employee disruptions that could have an adverse effect on the reputation, business, cash flows, results of operations and financial condition. A significant portion of the revenues are derived from a few geographical regions and any decrease in revenues from south India, including due to increased competition or supply, or reduction in demand, in markets in which the company operates, may have an adverse effect on the business, cash flows, results of operation and financial condition.The Company faces significant employee-related regulatory risks and any significant disputes with its employees and/or concerned regulators may adversely affect the business prospects, cash flows, results of operations and financial condition.Operational risks are inherent in the business as it includes rendering services in contrasting environments. A failure to manage such risks including any errors, defects or disruption in the service or inability to meet expected or agreed service standards, could have an adverse impact on the business, cash flows, results of operations and financial condition.The businesses of the company is manpower intensive and its inability to attract and retain skilled manpower could have an adverse impact on the growth, business and financial condition..Click on the attachment to read the full IPO report:.JSW Infrastructure IPO: All You Need To Know.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Updater Services IPO - Investment Rationale, Issue Details, Strengths, Financials, Risks: Anand Rathi

The 640 crore IPO opens today and the company has fixed a price band of Rs 280 to Rs 300 per share.

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Updater Services IPO - Investment Rationale, Issue Details, Strengths, Financials, Risks: Anand Rathi

The 640 crore IPO opens today and the company has fixed a price band of Rs 280 to Rs 300 per share.

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