Radiant Cash Management Services Limited IPO

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They are an integrated cash logistics player with leading presence in retail cash management (“RCM”) segment of the cash management services industry in India and are one of the largest players in the RCM segment in terms of network locations or touch points served as of March 31, 2022.

They provide services across 13,044 pin codes in India covering all districts (other than Lakshadweep) with about 55,513 touch points serving more than 5,388 locations as of July 31, 2022. Our marquee clients include some of the largest foreign, private and public sector banks, and the end user of our services include some of the largest e-commerce companies, retail chains, NBFCs, insurance firms, ecommerce logistics players, railways and retail petroleum distribution outlets.

For the four months ended July 31, 2022, Fiscals 2022, 2021 and 2020 our total annual currency movement, or the total value of the currency passing through our RCM business, amounted to ₹485.85 billion, ₹1,303.80 billion, ₹ 912.22 billion, and ₹ 1,290.77 billion. In Fiscal 2021, we were the Company with the second highest EBITDA margin, ROCE and ROE amongst organised players in the cash management services segment.

They cater to broad set of outsourcing requirements pertaining to cash management services for banks, financial institutions, organized retail and e-commerce companies in India. They operate their business across five verticals, namely 1) cash pick-up and delivery; 2) network currency management (also known as cash burial in industry parlance); 3) cash processing; 4) cash vans /cash in transit and 5) other value added services.

67% business comes from cash pick and delivery for banks.

Objects of the Radiant Cash Management Services Limited IPO:

The IPO is a mix of Fresh Issue and OFS A) Fresh Issue = 60 Cr and net proceeds of the Fresh Issue: 1. Funding working capital requirements. 2. Funding of capital expenditure requirements for the purchase of specially fabricated armoured vans. 3. General corporate purposes. B) OFS = 327.94 Cr
DRHP of Radiant Cash Management Services Limited IPO
RHP of Radiant Cash Management Services Limited IPO

Radiant Cash Management Services Limited IPO Details:

Open Date: Dec 23 2022
Close Date: Dec 27 2022
Total Shares: 39,185,606
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 60 Cr.
Lot Size: 150 Shares
Issue Price: ₹ 94-99 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jan 04 2023

Promoters And Management:

Col. David Devasahayam is the founder, Chairman and Managing Director of the Company. He holds a bachelor’s degree in science from Jawaharlal Nehru University along with a master’s degree in science in defence studies from University of Madras. He holds Post Graduate Studies on the 49th Staff Courses from Defence Services Staff College, Wellington, India. He has also completed the 44th session of the Owner/President Management Program at Harvard Business School. He has served in the Indian Army for over twenty four years. He has been associated with the Company since its incorporation. He has 17 years of experience in relation to his professional association with the Company. Among his many achievements are an award at the Security Leadership Summit in 2011 as well as ‘Asia’s Greatest Leader Award’ by ‘Asia One’ in 2018. Dr. Renuka David is the Whole-time Director of the Company. She has been associated with the Company since its incorporation. She holds a MBBS degree from Bharathiar University. She has completed her PhD (HC) from The American University for Global Peace in USA She has received her medical registration certificate from the Tamil Nadu Medical Council. She was previously employed as a medical officer in Apollo Hospitals, Chennai, as a casualty medical officer in Sree Uthradom Thirunal Hospital and as a contract doctor in the Assam Rifles. She has 17 years of experience in relation to her professional association with the Company. Mr. Ayyavu Palanichamy Vasanthakumar is the Nominee Director of the Company as appointed by Ascent Capital Advisors India Private Limited. He has been associated with the Company since January 3, 2019. He holds a bachelor’s degree in engineering from Bharathiar University and a master’s degree in business administration from Bharathidasan University. He is currently associated with Altius Capital India Limited as a Shareholder, I-Nurture Education Solutions Private Limited as a Nominee Director. He was working with Unit Trust of India till February 2002 before joining UTI Venture Funds Management Company Private Limited in March 2002. Currently, he is working as a Partner at Ascent Capital Advisors India Private Limited. He has around 19 years of experience in venture capital and private equity investments.

Financials of Radiant Cash Management Services Limited IPO:

A) Balance Sheet Of Radiant Cash IPO
Particulars (Fig. In Cr) 2022 2021 2020
PPE 13 9 7
Share Capital 140 127 120
Debt (Long-Term+ Short Term) 26 11 21
Inventory - - -
Trade Receivables 79 70 54
Trade Payables 1 3 1
Working Capital 120 112 79
Receivables days 101 115 79
B) P&L of Radiant Cash 
Particulars (Fig. In Cr) 2022 2021 2020
Revenue from Operations 286 222 248
Employees Benefit Expenses 50 39 45
Other Expenses 178 135 151
EBITDA 58 48 52
OPM% 20.28% 21.62% 20.97%
Other Income 1 2 3
Depreciation 4 3 2
Finance Cost 4 2 3
PBT 51 45 50
Tax 14 13 14
PAT 37 32 36
NPM% 12.89% 14.29% 14.34%
No. of Shares 13.43 13.43 13.43
EPS 2.76 2.38 2.68
C) Cash flow Statement of Radiant Cash  
Particulars (Fig. In Cr) FY 2022 FY 2021 FY2020
PBT 52 45 50
Cash Stuck in Working Capital -11 -12 -6
Cash Flow From Operations 31 28 41
CFO/PBT 59.62% 62.22% 82.00%
Capex Done -6 -3 -5
Raise Cash from Debt 16 0 2
Debt Repaid 0 10 0
Raise Cash from Equity 0 0 0
Cash in Hand 70 54 40
D) Ratio Analysis of Radiant Cash IPO  
EBITDA margins 20.28% 21.62% 20.97%
NPM 12.89% 14.29% 14.34%
D/E 0.19 0.09 0.18
Interest Coverage Ratio 14.5 24 17.33
Current Ratio 3.44 4.50 3.19
Asset Turnover 1.62 1.38 -
ROE 26.43% 25.20% 30.00%
ROCE 40.00% 36.00% 42.00%
 

Comparison With Peers:

Peers Revenue PAT 3 Year Rev. Growth 3 Year PAT Growth EPS P/E Mcap
SIS 10,059 326 8.88% 9.10% 22.13 16.2 5,603
Radiant 286 37 7% 1.38% 2.76 35.8 1,330
CMS Info 1,408 213 10.08% 29.00% 13.94 17.7 4,498

Recommendation on Radiant Cash Management Services Limited IPO:

Review and Recommendation of Radiant Cash Management IPO by IZ team is 4/10 1. Radiant Cash is an integrated cash logistics player with leading presence in retail cash management (“RCM”) segment of the cash management services industry in India and is one of the largest players in the RCM segment in terms of network locations or touch points served as of March 31, 2022. 2. There is only 7% growth in the top-line in the last 3 years and PAT growth is just 1.38%. So, Radiant Cash is not growing well. 3. As compared to CMS Info which is trading at P/E of 17x, while the asking P/E is 18x in Radiant if we annualize Fy23 numbers, which looks fully priced in.

Lead Manager of Radiant Cash Management Services Limited IPO:

  1. IIFL Securities Ltd
  2. Motilal Oswal Investments Advisors Private Limited
  3. YES Bank Limited

Registrar of Radiant Cash Management Services Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Radiant Cash Management Services Limited 28, Vijayaraghava Road, T. Nagar, Chennai 600 017, Tamil Nadu, India Phone: +91 044 4904 4904 Email: jayabharathi@radiantcashlogistics.com Website: https://radiantcashservices.com/

Discussion on Radiant Cash Management Services Limited IPO:

1 Comment

    Radiant Cash Management Services IPO final subscription –

    QIB 1.01x
    NII 0.66x
    RII 0.20x

    Total Subscription 0.53x

    Reply

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