AGS Transact Technologies Ltd IPO

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(i) AGS Transact is one of the largest integrated omnichannel payment solutions providers in India in terms of providing digital and cash-based solutions to banks and corporate clients. They provide customized products and services comprising ATM and CRM outsourcing, cash management, and digital payment solutions including merchant solutions, transaction processing services and mobile wallets.

(ii) They operate their business in the following segments:
– Payment Solutions
– Banking Automation Solutions
– Other Automation Solutions (for customers in the retail, petroleum, and colour sectors)

(iii) Their customers in the Payment Solutions segment include ICICI Bank Limited, Axis Bank Limited, HDFC Bank Limited and Federal Bank Limited. They have orders in hand from major OMCs including Hindustan Petroleum Corporation Limited (“HPCL”) and Indian Oil Corporation Limited (“IOCL”). Other corporate customers for its digital portfolio include Dr. Lal Pathlabs Limited, Patanjali Ayurved Limited, Sunshine Teahouse Private Limited (CHAAYOS), RJ Corp Limited, VRIPL Retail Private Limited, Om Sweets, Lata Mangeshkar Medical Foundation and Organic India Private Limited.

(iv) They also provide transaction switching services, where they integrate a variety of payment channels, including internet payment gateways and several mobile payment systems, to route, switch and process electronic transactions even across non-banking segments. This gives them the ability to cater to the needs of banks, retailers, petrol stations and other financial institutions across the payment transactions value chain and to assist our customers in the issuance of new cards, migration of their existing card base and the authorization of cards

Competitive Strengths
a) Omni-Channel Integrated Payment and Cash Solutions Provider
b)  Customer Driven Portfolio
c) Diversified Product Portfolio, Customer Base and Revenue Streams

Objects of the AGS Transact Technologies Ltd IPO:

The objects of the Offer are to (i) carry out the offer for sale by the Selling Shareholders; and (ii) to realize the benefits of listing of the Equity Shares on the Stock Exchanges

AGS Transact Technologies Ltd IPO Details:

Open Date: Jan 19 2022
Close Date: Jan 21 2022
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 680 Cr.
Lot Size: 85 Shares
Issue Price: ₹ 166-175 Per Equity Share
Listing At: NSE,BSE
Listing Date: Feb 01 2022

Promoters And Management:

(i) Mr. Ravi B. Goyal, is the Chairman and Managing Director of our Company. He was appointed as a Director on December 11, 2002, and as the Managing Director of our Company on October 1, 2008. He was most recently re-appointed as the Managing Director of our Company with effect from August 1, 2021. He is responsible for the management of the overall operations of our Company and our Subsidiaries. He is currently also on the boards of our Subsidiaries, ITSL, SVIL and GTSL. He holds a Bachelor of Engineering degree from the Mumbai University. (ii) Mrs. Anupama R. Goyal, is a Non-Independent, Non-Executive Director of our Company. She was appointed as a Director on April 1, 2010. She resigned on September 16, 2010 and was re-appointed as a Director on August 10, 2012. On September 18, 2017, she was re-appointed as a director liable to retire by rotation. She is also a director on the board of our Subsidiary, ITSL. She completed her school education from the Maharani Gayatri Devi Public School, Jaipur. (iii) Mr. Sudip Bandyopadhyay, is an Independent, Non-Executive Director of our Company. He was appointed as a Director on September 16, 2010 and was designated as an independent Director under the Companies Act, 2013 on March 12, 2015. He was re-appointed as an independent, non-executive Director of our Company on March 12, 2018. He is also a director on the boards of our Subsidiaries, ITSL and SVIL. He is a Chartered Accountant certified by the ICAI and a Cost and Works Accountant certified by the Institute of Cost and Works Accountants of India. Currently, he is the group chairman of Inditrade Group of Companies. He was the managing director of Destimoney Securities Private Limited until September, 2015. He has previously worked with Reliance Securities Limited as the Wholetime Director and was also on the board of several Reliance ADA Group companies..

Financials of AGS Transact Technologies Ltd IPO:

Particulars (in millions) March-21 March-20 Mar 19
Revenue 17,589 18,004 18,057
Cost of Material Consumed 2,133.91 2,337 2,855
Purchase of Stock in Trade 536 303 524
Changes in inventories -39.00 101 147
Employee Benefit Expenses 2,771 2,800 2,748
Other Expense 7,802 7,837 7,533
Operating profit 4,386 4,626 4,251
OPM % 25% 26% 24%
Finance Cost 1,330.00 1,304.00 1,366.00
Depriciation 2,596 2,446 2,273
Other Income 382 330 178
Profit Before tax 824 1,195.00 788
Tax Expense 276 365.00 126
Profit After Tax 575 833 676
EPS 4.62 7 5.58
 

Comparison With Peers:

As per DRHP, there is no peer in the listed market. However, we believe CMS Info Systems which was listed few days back can be taken as peer. CMS Info Systems is currently trading at P/E of 30x and AGS is coming up with an IPO at P/E of 43x based on FY21 numbers.

Recommendation on AGS Transact Technologies Ltd IPO:

Review and Recommendation of AGS Transact by InvestorZone is 3/10 1. Company deals with management of ATMs around the country and cash-management service. They have Omni-Channel Integrated Payment and Cash Solutions Provider, Customer Driven Portfolio with Strong Capabilities to Develop Customised Solutions In-house, diversified Product Portfolio, Customer Base and Revenue Streams Leading to Cross-Selling Opportunities and Long-Standing Relationships with Technology Providers and Customers 2. Revenue has almost flat at Rs.1800 Crores in the last 3 years.  3. PAT has declined from 65 Crores to 57 Crores in the last 3 years. 4. EPS (FY21) = 4.62, P/E = 37x 5. Total Outstanding Shares = 12 Crores, Mcap = 2100 Crores 6. ATM and Cash business is slowly getting reduced in the economy with the advent of UPI in the last 3 years. So, that is another negative point for the company.

Lead Manager of AGS Transact Technologies Ltd IPO:

  1. HDFC Bank Limited
  2. ICICI Securities Limited
  3. JM Financial Consultants Private Limited

Registrar of AGS Transact Technologies Ltd IPO:

  1. Link Intime India Private Limited

Company Address:

AGS Transact Technologies Ltd 601-602 Trade World, B Wing, Kamala Mill Compound Senapati Bapat Marg, Lower Parel, Mumbai 400 013 Phone: +91 22 6781 2000 Email: ipocompliance@agsindia.com Websitehttp://www.agsindia.com/

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