The BLS E-Services IPO has drawn 27.7 on its second day so far; Retail share booked 90 times

The initial public offering (IPO) of BLS E-Services also received strong response from investors, especially private and non-institutional investors, on the second day of the bidding process. The issue, whose bidding began on Tuesday, January 30, was booked around 16 times on the first day.

New Delhi-based BLS E-Services sells its shares in the price range of Rs 129 to Rs 135 apiece with a lot size of 108 shares and respective multiples thereafter. The issue is exclusively a new sale of up to 23,000 shares. The company aims to raise a total of Rs 310.93 crore through an IPO.

According to the data, investors placed bids for 37,98,17,532 shares, which is 27.72 times compared to the 1,37,02,904 shares offered for subscription at 12.50 pm on Wednesday, January 31. The three-day bid for the issue ends on February 1st, Thursday.

The portion for retail investors was subscribed 89.55 times while the portion reserved for non-institutional investors was subscribed 54.25 times. However, the quota for qualified institutional bidders (QIBs) was bid at 2.06 times and the portion reserved for BLS International shareholders was booked at 5.08 times at the same time.

Founded in April 2016, BLS-E Services is a digital service provider that provides business correspondence services to major banks in India, supported e-services and grassroots level e-governance services in India. They are the three main categories of its services in the country.

Brokerage firms are largely positive on the issue, citing the strong financial performance, asset-light model, deep-rooted network in the pan-India market and the service sector of the business. However, high valuations and increasing competition are the biggest disadvantages for going public.

BSL Eservices remains a key beneficiary of rapid adoption of banking and digitalization in urban and rural India – a trend that is expected to further accelerate over the next three to five years, allowing the company to post healthy growth rates of around 50 percent in the past. SMIFS said.

“We expect the company to continue to grow based on its already established footprint and acquisitions, as well as the impact of the issue proceeds deployed over the next two years. We believe this company could have very good growth prospects over the next five to six years.” “Equally high return ratios,” it added with the tag “Subscribe,” calling it a decent long-term investment.

Ahead of its IPO, BLS E-Services raised Rs 126 crore from 10 anchor investors by allotting 93.27 lakh shares at Rs 135 per share. The IPO will see 75 per cent of the net offering reserved for qualified institutional bidders (QIBs), with non-institutional investors getting 15 per cent and the remaining 10 per cent allocated to retail investors.

BLS E-Services is valued at a P/E ratio of 57.1x FY23 earnings. The company has no exactly comparable colleagues. However, based on comparison with listed peers with similar businesses, we believe BESL is aggressively valued. According to IndSec Research, key government projects in the area of ​​citizen services are being implemented for the states of Punjab, Uttar Pradesh and West Bengal.

“It provides BC services to SBI. It has a robust margin profile and management intends to further improve this through planned capital expenditures in technology and the establishment of more profitable BLS stores. A future growth driver for the company would be the establishment of citizen service centers for overseas governments. It is well-positioned for long-term growth,” it added with a subscribe tag.

Unistone Capital is the sole book-running lead manager of the BLS E-Services IPO, while Kfin Technologies is the registrar for the offering. The company's shares will be listed on both the BSE and NSE with Tuesday, February 6, 2024 being the tentative listing date on the bourses.

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