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  • Writer's pictureJatin Agarwal

Updater Services IPO


UDS logo

Company and IPO Overview:


Updater Services Limited was incorporated in the year 1990 to offer facility management services and business support services. Updater Services predominantly operate in the Business-to-Business (B2B) services space offering a range of business services. These can be broadly classified under 2 segments viz. the IFM segment and the BSS segment. The internal facilities management (IFM) vertical essential offers production support services, soft services, engineering services, warehouse management, general staffing etc. The other vertical of Business Support Services (BSS) offers audit and assurance services through its subsidiary company. In addition, it also offers additional support services like employee background verification services, airport ground handling services, sales enablement services and a lot more.


As of June 30, 2023, the company served 2,797 customers across various sectors, including certain global and Indian customers such as Procter & Gamble Home Products Limited ("P&G"), Aditya Birla Fashion and Retail Limited ("ABFRL"), Microsoft, Hyundai Motor India Limited ("Hyundai"), Saint-Gobain India Private Limited and more.


Updater Services IPO is the next main board IPO which is ready to go public, the company is about to raise around ₹ 640 crores via IPO comprising Fresh Issue upto ₹ 400 crores and Offer For Sale upto ₹ 240 crores. The price band of the issue is ₹ 280 to ₹ 300 with a minimum market lot of 50 shares. Updater Services IPO subscription quota for retail is 10.00%, NII is 15.00% and QIB is 75.00%.


Financials (rounded off):

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2021

1216

48

31/03/2022

1498

57

31/03/2023

2112

35


Objectives of the Issue:

1. Repayment and /or prepayment of certain borrowings availed by the Company.

2. Funding the working capital requirements.

3. Pursuing inorganic initiatives.


IPO Details:

IPO Date

25/09/2023-27/09/2023

Face Value

₹10 per share

IPO Price Band

₹280-₹300 per share

IPO Lot Size

50 Shares

Listing at

NSE, BSE

Basis of Allotment

04/10/2023

Credit of Shares in Demat

06/10/2023

Listing Date

09/10/2023

Pre-Issue Shareholding

80.58%

Post-Issue Shareholding

-

Retail Minimum Lot Size

50 shares (₹15,000)


Important things to note about the Company:


Top reasons to consider the IPO:


1. Updater Services is a leading integrated business services platform, operating across diverse segments. It has long standing relationships with customers across diverse sectors leading to recurring business.


2. Updater Services has a track record of successful acquisition and integration of high-margin business segments with technology at the forefront of the current and future business.


3. The company enjoys leadership in India’s business services sector, offering Integrated Facility Management (IFM) and Business Support services across the country.


4. Highly experienced Management team with support from Private Equity Investors makes the future promising.


Risk Factors to watch out in the IPO:


1. While the sales of Updater Services have shown consistent growth, its profits have not been consistent. The company’s profit margins range between 1% to 3%, which is too low as per industry standards.


2. Updater Services needs High working capital to operate and the company has also generated negative cash flows from investing and financing activities in previous years.


3. Updater Services operates in a highly competitive industry. This sector has low barriers to entry, allowing more competition to flow in easily. In case the company fails to effectively manage its business, its cash flow could be adversely affected.

4. Updater Services and its promoters are currently facing legal cases. In case of any adverse ruling, the business could be impacted due to financial penalties or liabilities.


Crisp Insights:

  • Updater Services IPO GMP Today: The Company is commanding a GMP of NIL.

  • Updater Services GMP is weak and hence, investors need to be careful.

  • Updater Services IPO Review: The Company has created a niche place in the area of services it is offering under one roof. Though the IPO appears aggressively priced, it holds promising prospects. Well-informed investors may park funds for medium to long-term rewards.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.




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