The initial public offering (IPO) of BLS E-Services continued to receive a strong response from the investors during the second day of the bidding process, majorly from retail and non-institutional investors. The issue, which had kicked-off for bidding on Tuesday, January 30, was booked about 16 times on day one.
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The New Delhi-based BLS E-Services is selling its shares in the price band of Rs 129-135 apiece with a lot size of 108 shares and its multiples thereafter. The issue is entirely a fresh sale of up to 23,0,30,000 equity shares. The company is looking to raise a total of Rs 310.93 crore via IPO.
According to the data, the investors made bids for 37,98,17,532 equity shares, or 27.72 times, compared to the 1,37,02,904 equity shares offered for the subscription by 12.50 pm on Wednesday, January 31. The three-day bidding for the issue will conclude on February 1, Thursday.
The allocation for retail investors was subscribed 89.55 times, while the portion reserved for non-institutional investors saw a subscription of 54.25 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for 2.06 times and the portion reserved for BLS International shareholders was booked 5.08 times as of the same time.
Incorporated in April 2016, BLS-E Services is a digital service provider that offers business correspondence services to major banks in India, assisted E-Services, and E-Governance services at the grassroots level in India. They are the three key categories of its services in the country.
Brokerage firms are mostly positive on the issue citing its strong financial performance, asset light model, deep rooted network in the pan-India market and service sector nature of the business. However, rich valuations and rising competition are the major drawbacks for the IPO.
BSL Eservices remains a key beneficiary of the rapid acceptance banking and digitisation in urban as well as rural India a trend that should accelerate further over the next 3-5 years enabling the company to clock healthy growth rates similar to 50 per cent that the company has cocked in the past, said SMIFS.
“The company is expected to clock on the back of already established presence and acquisitions alongwith the impact of the issue proceeds being deployed over the next 2 years, we believe that this company could have very high growth prospects over the next 5-6 years with equally strong return ratios,” it added with a ‘subscribe’ tag as a decent long rem investment.
Ahead of its IPO, BLS E-Services raised Rs 126 crore from ten anchor investors as the company allotted 93.27 lakh shares at Rs 135 per shares. The IPO has reserved 75 per cent of the net offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 10 per cent allocated to retail investors.
BLS E-Services is valued at P/E of 57.1x FY23 earnings. The company doesn’t have exact like-to-like peers. However, based on the comparison with listed peers having similar businesses, we believe, BESL is valued aggressively. It is executing key government projects of citizen services for the states of Punjab, Uttar Pradesh and West Bengal, said IndSec Research.
“It provides BC services to SBI. It has a robust margin profile and management intends to improve this further with planned capex investments in technology and setting up more profitable BLS Stores. A future growth driver for the company would be setting up citizen service centers for overseas governments. It is well poised for long term growth,” it added with a ‘subscribe’ tag.
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Unistone Capital is the sole book running lead manager of the BLS E-Services IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with February 6, 2024, Tuesday, as the tentative date of listing at the bourses.
