AGS Transact Technologies IPO: The initial public offering (IPO) of payment solutions provider AGS Transact Technologies opened for subscription on Wednesday, January 19, 2022. The offer got 59 per cent subscribed so far till 11:59 am on the first day of bidding. It received total bids for 1,68,21,160 shares across both the stock exchanges against 2,86,74,696 shares on offer, data from BSE showed. The Rs 680 crore AGS Transact Tech IPO will be available for subscription till Friday, January 21, 2022, and the price band of the company has been fixed at Rs 166-175 per share. AGS Transact Technologies is an integrated omnichannel payment solutions provider and provides digital and cash-based solutions to banks and corporates. The IPO is entirely an offer for sale (OFS) by a promoter and other selling shareholders. The company’s promoter Ravi B Goyal will sell shares worth up to Rs 677.58 crore. Half of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for the retail investors and the remaining 15 per cent is for non-institutional investors. Investors who wish to subscribe to AGS Transact Tech IPO can bid in a lot of 85 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,875 to get a single lot of AGS Transact Technologies. The shares will be listed on both BSE as well as the National Stock Exchange (NSE). The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, January 24, 2022, upto 12:00 pm. If they fail to do so then their application may not be considered. ICICI Securities, HDFC Bank and JM Financial are the book running lead managers to the IPO while Link Intime India is the registrar of the issue. AGS Transact Technologies provides customised products and services comprising ATM and Cash Recycler Machines (CRM) outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets. The company has tried multiple times to go public. Prior to this, in 2018, it had filed its draft papers with market regulator Sebi for raising Rs 1,000 crore through IPO and although it had secured the regulator’s nod it did not go ahead with the plan. Before that, it had filed draft papers with the regulator in 2015 to raise up to Rs 1,350 crore through an IPO and prior to that, the firm had filed preliminary papers with Sebi in 2010 to float an IPO. Before heading into this IPO, AGS Transact Tech on Tuesday raised nearly Rs 204 crore (Rs 2,03,99,99,675.00) from 17 anchor investors in lieu of 1,16,57,141 equity shares at Rs 175 each, data from the stock exchanges showed. The anchor investors include the likes of Ashoka India Equity Investment Trust, Kuber India Fund, Saint Capital Fund, IIFL Special Opportunities Fund, Abakkus Growth Fund, HDFC Mutual Fund (MF), Nippon India MF and Quant MF. The research team at Anand Rathi Share and Stock Brokers in their IPO note has recommended a "Subscribe- Long Term" to the offer. Anand Rathi Research in its IPO report said, "AGS Transact has a diversified product portfolio and the majority of the revenues are contributed by banking automation solutions, which includes supply and installation of ATMs and other automated banking products. The Company is available at the upper end of the IPO price band, at 38.5x its FY21 earnings. The issue is priced at a P/BV of 3.7 based on its NAV of Rs 47.1, with a market cap of Rs 21,069 million, which we believe is quite reasonable." "The diversified product portfolio, Customer Base and Revenue Streams Leading to Cross-Selling Opportunities for the company. However, the company’s business is dependent on their Banking partners. The company also has threats from new fintech companies undertaken by newage digital Payment system viz micro-ATM, Aadhaar Enabled Payment System (AePS), UPI etc. While evaluating on the financial front at the upper end of the IPO price band the valuation seems to be reasonable, factoring all the above Scenarios, we assign “Subscribe-Long Term” rating to this IPO," the report added. The share allotment is likely to take place on Thursday, January 27, 2022, and the shares are expected to be listed on Tuesday, February 1, 2022, according to the timeline given in the red herring prospectus (RHP).
