Mixed reception: Updater Services debuts flat on BSE and at a 5% discount on NSE

Updater Services Limited, a company specialising in facility management services and business support services (BSS), made its debut in the Indian stock market today.

The stock made its debut at Rs 299.90 per share, almost unchanged compared to the issue price on the BSE. However, on the NSE, the stock opened at Rs 285 per share, marking a 5% decrease from its initial public offering price of Rs 300 per share.

As of the time of writing, the stock is currently trading at Rs 294.55 on the BSE, with intraday highs and lows of Rs 299.90 and Rs 285, respectively. The current market capitalization of the company stands at Rs 1,970 crore.

Updater Services Limited has outlined specific plans for the use of the net proceeds generated from the issue. These funds will be allocated towards repaying certain company borrowings, addressing working capital requirements, pursuing potential inorganic initiatives, and for general corporate purposes.

Company profile

Updater Services Limited specialises in facility management services and business support services (BSS). The company operates in the realm of Business-to-Business (B2B) services, providing a wide range of business services categorized into two main segments:

IFM & Other Services Segment: This segment encompasses services such as Production Support Services, Soft Services, Engineering Services, Washroom and Feminine Hygiene Services, Warehouse Management, General Staffing, and more.

BSS Segment: In this segment, Updater Services Limited Offers Audit and Assurance services through its subsidiary, Matrix. Additionally, the company provides services such as employee background verification checks, airport ground handling services, sales enablement services, and more through its various subsidiaries.

It operates on a nationwide scale, boasting an extensive network comprising 4,331 locations (excluding staffing locations) managed through 129 points of presence. This network includes 116 offices within India and 13 offices located overseas, as of June 30, 2023.

Subscription details 

On September 27, 2023, the final day of the IPO window, the IPO witnessed a moderate response with a subscription rate of 2.96 times. The public issue received mixed interest, as the retail category was subscribed 1.45 times, the QIB category achieved a subscription rate of 4.50 times, and the NII category reached a subscription rate of 0.89 times.

The company attracted Rs 288 crore from various anchor investors by allocating 96 lakh equity shares at Rs 300 per share. The complete lock-in period for these anchor investors ends on February 08, 2024.

The IPO price range was set between Rs 280 and Rs 300, with a face value of Rs 10 per share and a lot size of 50 shares. The total size of the company’s IPO was Rs 640 crore, and the final share issue price was fixed at Rs 300 each.

Financial Performance: 

Conclusion 

The crucial question that arises in everyone’s mind is whether to hold onto the shares or not. Given the current market conditions, where the broader indices have fallen from their all-time highs and continue to decline even today, investors who applied for listing gains but were disappointed on the listing date due to shares not being listed at a premium may consider booking their positions and waiting for better levels to emerge.

Furthermore, the company’s net profit fell by approximately 40% in FY23, dropping from Rs 57.37 crore to Rs 34.61 crore. This fall is not reflected in revenue, which has shown a growth of 41% in FY23.

On the other hand, investors with a higher risk appetite may choose to hold the shares for the medium to long term, a strategy that could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.