BVG India IPO - 7 things to know about
BVG India Ltd, one of India’s top facilities and infrastructure management companies, had filed its draft red herring prospectus (DRHP) in September 2021 and SEBI approval for the IPO is still awaited. The IPO of BVG India will be a combination of a fresh issue and an offer for sale.
BVG provides a number of support services which include mechanized housekeeping, industrial housekeeping, manpower supply, security services, hard services and janitor services.
7 important things to know about the BVG India IPO
1) BVG India Ltd has filed for an IPO with SEBI in the approximate size range of Rs.1,200 crore to Rs.1,300 crore. The IPO of BVG India Ltd will comprise of a fresh issue of Rs.200 crore and an offer for sale or OFS of 71,96,214 shares by the promoters and existing shareholders.
The company is backed by several marquee institutional and PE investors and some of them would be looking to take an exit as part of this IPO. Promoters will also look to participate in the IPO.
2) Out of the total issue size in the approximate range of Rs.1,200 crore to Rs.1,300 crore, the OFS portion will comprise of 71,96,214 shares in total with an approximate OFS value in the range of Rs.1,000 crore to Rs.1,100 crore. Let us first focus on the promoters participating in the OFS portion.
Promoter Hanmantrao Ramdas Gaikwad will offer 16,98,458 shares in the OFS while Umesh Gautam Mane will offer 300,523 shares as part of the OFS. Among other key selling investors; Strategic Investment FM Mauritius Alpha Ltd will offer 33,83,589 shares while Strategic Investment FM Mauritius B will sell up to 774,194 shares in the OFS.
Other key shareholders will offload 10,39,450 shares as part of the offer for sale. The OFS will not dilute the capital or the EPS but only lead to change in ownership, increase in public float and enable listing of the company.
3) The Rs.200 crore fresh issue component of the BVG India IPO will be predominantly used to repay / prepay debt of the company. In fact, more than 90% of the fresh issue amount or Rs.180 crore will be utilized by the company only to repay / prepay the borrowings. The balance amount will be allocated for general corporate purposes and other routine working capital expenses.
4) The company has been backed by UK based private equity major 3i Group PLC, which has been one of the early investors in the company. The IPO will allocate 50% of the total IPO allocation to the qualified institutional buyers (QIB).
However, this QIB portion will be reduced to the extent of the anchor allocation portion done ahead of the IPO opening. The IPO will allocate 15% for non-institutional investors (NIIs) also known as high net worth investors (HNIs. The balance 35% will be allocated to retail investors i.e. individuals and HUFs investing up to a maximum of Rs.2 lakhs in a single application.
5) BVG India Ltd employs over 54,000 personnel across its regular rolls and its contract employment models. It currently serves over 582 corporate and institutional clients across over 100 cities in India. These cities are spread across 20 different states and union territories giving them the best spread among like players.
Apart from the routine facilities management services, BVG India Ltd also provides add on services like beach development, beach cleaning services, operation and maintenance of buses and electric buses etc.
6) BVG India Ltd has reported strong numbers for the last few financial years. For the FY 21 full year, BVG India Ltd reported total revenues from operations of Rs.1,668 crore, lower than Rs.1,930 crore in the year ago period.
However, this fall is more because facilities management is a contact intensive business and tends to get impacted in such times. Similarly, the net profits for FY21 stood at Rs.86.11 crore lower than Rs.122 crore in the previous year, again due to the impact of fixed costs not getting adequately absorbed in the low volume business shift.
7) The IPO of BVG India Ltd will be lead managed by ICICI Securities, HSBC Securities and Capital Markets, and JM Financial Services. They will act as the book running lead managers or BRLMs to the issue. Link Intime India Private Limited has been appointed as registrars for the issue.
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