AGS Transact IPO: AGS Transact Technologies is set to become the first company to be listed on the stock exchange in the year 2022. The company’s Initial Public Offer (IPO) will open for subscription from tomorrow i.e. Wednesday, January 19. After peace in the IPO market for about a month, now the IPO of a company has come. Before investing in the first IPO of the year, let’s know some important things related to it-
The IPO of AGS Transact Technologies will open for subscription on Wednesday, January 19 and bidding can be done till January 21. If a round is held for single investors, the IPO will open for them on January 18.
2) AGS Transact IPO Price Band
The company has fixed a price band of Rs 166 to 175 for AGS Transact Technologies.
3) AGS Transact IPO Details
AGS Transact Technologies plans to raise Rs 680 crore from this IPO. Under the IPO, the company did not issue any new shares, but it is a complete offer-for-sale (OFS), under which the promoters and shareholders of the company will sell their stake. This means that the proceeds from this IPO will not go to the company’s account, but will go to the promoters and shareholders.
Under the offer-for-sale (OFS), the company’s promoter Ravi B Goyal will sell shares worth about Rs 677.58 crore. Apart from this, VC Gupta, Shailesh Shetty, Rakesh Kumar, Nikhil Patiyat and Rajesh Harshedari Shah will jointly sell shares worth Rs 2.42 crore.
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4) AGS Transact IPO Lot Size
Investors can bid for the IPO of AGS Transact Technologies by lot. There will be 85 shares of the company in one lot. Thus adding on the upper price band, investors need to invest a minimum of Rs 14,875 (Rs 85X175) for a lot. An investor can bid for a maximum of 13 lots and for this he has to invest Rs 1,93,375.
5) Reserve 35% for retail investors
50% of the IPO of AGS Transact Technologies is reserved for Qualified Institutional Buyers (QIBs). Whereas 35% is reserved for general investors i.e. retail investors, while the remaining 15% is reserved for non-institutional investors.
6) What does the company do?
AGS Transact Technologies was established in December 2022. It provides customized products and services to banks and corporates for services such as ATMs and Cash Recycler Machines (CRM), outsourcing cash management, digital payment solutions, transaction processing services and mobile wallets. The promoters of the company are Ravi B Goyal and Vineha Enterprises. The combined stake of both in the company is 97.61 percent while 1.51 percent is held by AGSTTL Employees Welfare Trust.
As of March 31, 2021, it is the second largest company in the country by revenue from ATM services. As of 31 August 2021, it has installed 2,21,066 payment terminals and is the company with the largest number of POS terminals installed at petrol pumps. Its banking customers include around 50 banks including ICICI Bank, HDFC Bank and Axis Bank.
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7) Financial data
AGS Transact Technologies had a profit of Rs 54.79 crore in FY21. However, this was less than its profit of 83.01 crore in the previous financial year. Similarly, the company’s income also declined to Rs 1,758.94 crore in FY21 from Rs 1,800.44 crore in its previous financial year.
In the first 5 months of FY 2022 i.e. from April to August 2021, the company’s revenue declined by Rs 18.1 crore to Rs 753.4 crore on a yearly basis. The company said that due to the partial restrictions imposed due to Corona, there was little impact on its earnings.
According to market watchers, AGS Transact Technologies shares were trading at Rs 195-196 in gray market on Tuesday, which is Rs 20-21 higher than its issue price of Rs 175. In percentage terms, this is a premium of around 12 per cent over the issue price. The company’s gray market premium (GMP) has been witnessing a steady decline since October 2021, which is a matter of concern for potential investors.
A dealer said that in October 2021, the shares of AGS Transact Technologies were trading at Rs 550 in the gray market, but since then there has been a steady decline. The gray market premium means that the unlisted market is expecting the shares of AGS Transact Technologies to be listed at a premium of 12 per cent.
9) Listing Date
It is expected that this IPO may get listed on the exchange on February 1. The shares of the company will be listed on BSE and NSE.
10) IPO expected to get mixed response
Abhay Doshi, Founder, Unlisted Arena, said, “The slowdown in economic activities due to the pandemic resulted in lower growth for the company. The issue price has been fixed at 38 times PE multiple based on FY21 earnings. Due to these factors, the IPO may get a mixed response. However, the revenue from digital solutions will have to be monitored further.
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