BLS E-Services IPO Financial Analysis

BLS E-Services IPO Financial Analysis

by Tanushree Jaiswal Last Updated: Jan 30, 2024 - 04:31 pm 827 Views
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BLS E-Services, a digital services provider, It is set to launch its IPO on 30 January 2024. Here's a summary of the company's business model, strengths, risks, and financials to assist investors in making informed decisions.

BLS E-Services PO Overview

BLS E-Services Ltd, established in 2016, specializes in digital services, catering to major banks in India. A subsidiary of BLS International Services Ltd, it is the sole listed company in India in this domain. The company's services include Business Correspondents, Assisted E-Services, and E-Governance, with a focus on underserved populations in hard-to-reach areas.

As of FY23, the merchant network totals 92,427. With 3,071 employees, including 2,413 contract workers, BLS E-Services Ltd operates through Common Service Centres (CSCs) to deliver Government to Citizen (G2C) and Business to Customer (B2C) services. These CSCs, managed by self-employed youth (Village Level Entrepreneurs), ensure last-mile service delivery to remote areas. The primary objective of CSC is to provide smart, citizen-centric, ethical, efficient, and effective governance to Indians, leveraging technology while creating employment opportunities for village-level youth.

BLS E-Services IPO Strengths

1- It offers a diverse range of services that sets it apart in the digital services industry.
2- It runs a business model that doesn't heavily depend on owning many physical assets.
3- A business approach that earns income through various channels and requires very little spending on attracting and keeping customers.
4- Joined forces with the National e-Governance Division to provide UMANG services through our digital platform.

BLS E-Services IPO Risk

1- A big chunk of their income comes from Public Sector Undertaking (PSU) banks, making up 60% of their total revenue in the fiscal year 2023.
2- The company operates in a tough market, facing competition from both organized and unorganized players in the industry.
3- The company primarily engages in fee and commission-based activities, and its financial performance could be negatively impacted if it encounters challenges in generating income through such operations.
4- Much of the company's money comes from its subsidiaries working with banks. The banks follow rules set by the Reserve Bank of India. If the RBI changes its rules, it could impact the company's business and finances.

BLS E-Services IPO

BLS E-Services IPO is scheduled from 30 to 1 February 2024. It has a face value of ₹10 per share, and the IPO's price range is ₹129-135 per share.

Total IPO size (₹Cr) 311.00
Offer for sale (₹Cr) 0.00
Fresh issue (₹Cr) 311.00
Price band (₹) 129-135
Subscription dates 30 Jan 2024 to 1 Feb 2024

Financial Performance of BLS E-Services IPO

BLS E-Services reported a Profit After Tax (PAT) of ₹0.86 crore in the financial year 2021. However, in 2022, the company incurred a loss with a negative PAT of ₹6.53 crore. Moving forward, in the financial year 2023, BLS E-Services bounced back with a PAT of ₹1.03 crore.

Period Total Assets (₹ cr) Total Revenue (₹ cr) PAT(₹ cr)
2023 139.4 20.65 1.03
2022 19.72 10.33 -6.53
2021 32.23 3.76 0.86

Key Ratios

In the financial year 2021, BLS E-Services had a Return on Equity (ROE) of 32.54%, which increased to 35.70% in 2022. However, in the subsequent year, 2023, the ROE decreased to 17.65%. ROE indicates how well the company generated returns in relation to its equity during these specific years.

Particulars FY23 FY22 FY21
Sales Growth (%) 151.35% 49.95% -
PAT Margins (%) 7.77% 5.56% 4.88%
Return on Equity (%) 17.65% 35.70% 32.54%
Return on Assets (%) 10.52% 9.62% 7.76%
Asset Turnover Ratio (X) 1.35 1.73 1.59
Earnings per share (₹) 3.02 0.89 0.52

Promoters of BLS E-Services IPO

The promoters of the company are Ajay Makhija and Akshay Makhija, and currently, they hold 100.00% stake. However, after the issuance of new shares in the IPO, the promoter's equity holding will be diluted to 73.47%.

Final Words

This article takes a closer look into BLS E-Services IPO, scheduled for subscription from 30 January 2024. It suggests that potential investors thoroughly review the company's details, financials, subscription status and GMP. Grey Market Premium indicates the anticipated listing performance, providing valuable insights for investors to make well informed decisions. On 30 January 2024, BLS E-Services PO GMP is ₹115 up from the issue price reflecting a 117.04% increase
 

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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