BLS E-Services Limited has launched its initial public offering (IPO). The IPO is a book built issue of a fresh issuance of 2.3 crore shares worth ₹310.91 crore. The issue opened for subscription on January 30, 2024 and will close on February 01, 2024 and is scheduled to list on the mainboard exchanges on February 06, 2024. There is no offer for sale component in the public issue of BLS E-Services.
BLS E-Services Ltd Initial Public Offering (IPO) promises an exciting opportunity for investors to partake in India’s digital service landscape. Let’s take a closer look at this promising venture and dissect its potential for growth and investment.
IPO Details
BLS E-Services Ltd, established in 2016, is a technology-enabled digital service provider offering Business Correspondents, Assisted E-services, and E-Governance Services across India’s grassroots levels. The IPO subscription window opens on January 30, 2024, and closes on February 1, 2024, with allotment scheduled for February 2, 2024, and listing on February 6, 2024.
- Opening Date: January 30, 2024
- Closing Date: February 1, 2024
- Allotment Date: February 2, 2024
- Listing Date: February 6, 2024
- Price Band: ₹129-135 (face value – ₹10 per share)
- Issue Size: ₹310.91 crore
- Offer Type: Fresh Issue
- Lot Size: 108 shares
- Minimum Investment (Retail): ₹14,580
- IPO Reservation: QIB: 75%, HNI: 15%, Retail: 10%
Note: Refer to RHP document at SEBI website for detailed information.
Company Overview
BLS E-Services Ltd operates as a subsidiary of BLS International, a global leader in visa application outsourcing. BLS International’s profitable operations and extensive experience in the industry provide a solid foundation for BLS E-Services Ltd’s growth.
With a robust network of over 98,000 touchpoints, including BLS Stores and Touchpoints, the company delivers essential services spanning banking, healthcare, education, and more to urban, semi-urban, rural, and remote areas.
Purpose of the IPO
The purpose of the IPO is to utilize the proceeds for various strategic initiatives. These include strengthening technology infrastructure to develop new capabilities and consolidating existing platforms. Furthermore, funding will be allocated for organic growth through the establishment of BLS Stores and achieving inorganic growth through strategic acquisitions.
Economic and Sectoral Outlook
India’s economy is thriving, boasting the highest GDP growth rate among major emerging economies. The digital revolution ignited by the government’s Digital India initiative in 2016 has ushered in a new era of governance and development, bolstering the digital service sector.
Financial Performance
BLS E-Services Ltd has demonstrated impressive financial growth, with revenue and profit steadily climbing over the years. Key ratios such as Return on Equity (RoE) and Debt to Equity ratio reflect the company’s sound financial health and growth trajectory.
Revenue
- March 2021: ₹65.23 crore
- March 2022: ₹98.40 crore
- March 2023: ₹246.29 crore
- September 2023: ₹158.05 crore
Profit:
- March 2021: ₹3.15 crore
- March 2022: ₹5.38 crore
- March 2023: ₹20.33 crore
- September 2023: ₹14.68 crore
Total Assets:
- March 2021: ₹40.59 crore
- March 2022: ₹55.93 crore
- March 2023: ₹179.47 crore
- September 2023: ₹213.77 crore
Management and Strengths
Backed by a seasoned management team, BLS E-Services Ltd stands tall with a strong lineage and proven track record. Let’s meet the key members of the management team:
Rahul Sharma (Executive Director and CFO):
- Age: 38 years
- Qualification: Chartered Accountant
- Experience: Over 16 years in taxation, finance, and accounts
Shikhar Aggarwal (Chairman and Non-Executive Director):
- Age: 32 years
- Experience: Over 6 years in providing technology-enabled services
- Recognition: Listed in the “Times 40under40” list for the year 2021
The company’s strategic strengths lie in its financial growth, experienced management, and potential government support.
Parent Company: BLS International
BLS E-Services Ltd operates as a subsidiary of BLS International, a global leader in visa application outsourcing. With a proven track record and profitable operations, BLS International’s expertise and resources contribute significantly to BLS E-Services Ltd’s growth and stability.
Risks and Valuation
While the IPO presents a compelling investment opportunity, it’s not without its risks. Factors such as perceived overvaluation, declining RoE, and past termination of agreements pose potential challenges. However, the company’s consistent growth and industry comparisons justify its valuation.
Key Ratios (FY 2022-2023):
- RoE: 33.33%
- Debt to Equity Ratio: 0.05
- EPS: ₹3.02
- Net Asset Value per Share: ₹18.76
- P/E: 45 (based on 2023 EPS and maximum issue price of ₹135)
Investor Sentiments
Investor sentiment remains positive, as evidenced by the 111% premium in the grey market. The low competition in the company’s sector further fuels optimism among investors.
In conclusion, BLS E-Services Ltd IPO offers investors a chance to ride the wave of India’s digital transformation. With its robust business model, strong financial performance, and promising growth prospects, the IPO appears worth considering. However, investors are advised to conduct thorough due diligence and assess risks before making investment decisions.
Author: Amit Gupta, Research Analyst.
Disclaimer: This is not an investment advice. Views and opinion are author’s personal and for educational and informational purposes.
View more upcoming IPO details here.
