AGS Transact Technologies IPO
AGS Transact Technologies traded at a double-digit premium in the grey market, an unofficial platform for trading in IPO shares, ahead of the opening of its public issue.
The IPO, which is entirely an offer-for-sale by promoters, will open for subscription on January 19. The price band for the offer, which will close on January 21, has been fixed at Rs 166-175 per share.
The company is going to garner Rs 680 crore through its public issue and all the money, after deducting issue expenses, will go to selling shareholders, including promoters.
AGS Transact was available at a price of Rs 195-196 per share in the grey market, a 11.4-12 percent premium over the upper price band of Rs 175 per share, as per the IPO Watch and IPO Central.
In the unlisted market, the price has seen a sharp decline of more than 60 percent from its peak of Rs 550 a share touched in October 2021. It is quoting Rs 185-195 per share now, a dealer said.
“AGS Transact has re-priced its offer very well with reduced offer valuations considering the market scenario and investor sentiments but we see few points of concerns with 100 percent offer-for-sale sale followed by losses on books incurred in the last five months of FY22 and a flat growth in topline,” says Prashant Tapse, Vice-President (Research) at Mehta Equities.
He said that based on these parameters, AGS has witnessed a sharp correction in its grey market premium from its peak to Rs 20-21 per share due to dampening sentiments in the broader market, leading to profit-booking attempts in the grey market space as many IPOs failed to perform on the listing day.
Last few IPO offers like Shriram Properties, Star Health, Metro Brands debuted with disappointment due to stretched valuations. “Based on all parameters and assumptions, the AGS issue is fully priced and expect muted subscription demands to its upcoming initial public offering. So, we advise risk takers may consider an investment only with a long-term perspective,” Tapse said.
AGS Transact claimed to be one of the largest integrated omni-channel payment solutions providers in India in terms of digital and cash-based solutions for banks and corporate clients, as of March 31, 2021.
The company provides customised products and services, comprising ATM and CRM outsourcing, cash management and digital payment solutions, including merchant solutions, transaction processing services and mobile wallets.
AGS clocked lower profit at Rs 54.79 crore in FY21, down from Rs 83.01 crore a year back, and its revenue declined marginally to Rs 1,758.94 crore from Rs 1,800.44 crore in the same period. In five months to August 31, 2021, it reported a loss of Rs 18.1 crore on revenue of Rs 753.4 crore.
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