IPO Synopsis
IPO Synopsis
BVG India Ltd has filed its DRHP with SEBI, worth Rs.1,200-1,300 crore. The IPO consists of a fresh issue worth Rs.200 crore and an offer for sale of up to 71,96,214 equity shares. Hanmatrao Ramdas Gaikwad is offloading 16,98,458 equity shares and 300,523 equity shares are being offloaded by Umesh Gautam Mane. Strategic Investment FM Alpha Ltd is offloading 33,83,589 equity shares, Strategic Investment FM B is offloading 7,74,194 equity shares.
The book running lead managers to the issue are ICICI Securities Ltd, JM Financial Ltd and HSBC Securities and Capital Markets Pvt Ltd. The company is also planning to go ahead with a pre-IPO placement of Rs.40 crore.
Objective of the offer
Rs.180 crore of the net proceeds are to be used to repay and prepay the borrowings undertaken by the company and the rest will be used for general corporate purposes.
About BVG India Ltd
Backed by UK based private equity 3i Group, is India’s largest integrated services company. The company provides soft services like mechanized house cleaning, manpower supply, janitorial services etc and hard services like electro-mechanical works, highway maintenance etc and also specialized services like pain shop cleaning and logistics management. In addition to all this, the company also provides services such as waste management, emergency police and medical response services.
The company has served their top 10 clients for a long term of 5 years, as of 30 June, 2021. As of 30 June 2021 they have more than 54,000 employees. They have served more than 490 clients in 100 cities, across 20 states and 5 union territories. Due to intense marketing efforts and referrals, the company has managed to increase their customer base by 58 in the last three fiscal years. In FY21, the company had a leading market share of 6.4% in the integrated facilities management services market. They have been providing 9 services to a leading Indian automobile manufacturer since the company’s inception.
Their clients are diversified across different sectors like the automobile sector, hospitals and healthcare sector, transport and transit and infrastructure sector etc. BVG India is the first company in the country to be awarded contracts in order to improve emergency police responsive services.
BVG India Ltd Financial Status
Financials:
|
Particulars (In Rs cr) |
FY21 |
FY20 |
FY19 |
|
Revenue from operations |
1,674.6 |
1,940.43 |
1,829.84 |
|
PAT |
86.11 |
122.50 |
84.51 |
|
EBITDA |
231.74 |
- |
181.1 |
|
EPS (In Rs) |
32.31 |
45.98 |
31.72 |
|
Particulars (In Rs cr) |
FY21 |
FY20 |
FY19 |
|
Total Assets |
1,912.75 |
1,898.75 |
1,741.82 |
|
Total Borrowing |
547.3 |
621.51 |
583.63 |
|
Equity Share Capital |
25.71 |
25.71 |
25.71 |
Peer Comparison: FY21
|
Company |
Total Income in (In Rs bn) |
Market Share |
EBITDA Margin FY20 |
|
BVG India Ltd |
16.75 |
6.40% |
13.02% |
|
ISS Facility Services India Pvt Ltd |
10.10 |
3.90% |
3.60% |
|
Updater Services Pvt Ltd |
11.20 |
4.30% |
4.32% |
|
Sodexo Facilities Management Services |
9.10 |
3.50% |
3.31% |
|
Dusters Total Solutions Services Pvt Ltd |
7.20 |
2.80% |
5.90% |
|
JLL India Ltd |
7.45 |
2.90% |
8.60% |
|
CBRE South Asia Pvt Ltd |
5.8 |
2.20% |
6.20% |
|
OCS Group Pvt Ltd |
4.7 |
1.80% |
4.10% |
The Key points are-
IPO Key Points
-
Strengths
1. BVG India is the largest integrated service provider in the country with a market share of 6.4% in the integrated FMS market in FY21 and have also recorded the highest revenue among all its competitors
2. They have a very diverse base of clients and have strong relationships with them. Of te 475 clients serviced in FY21, 192 were in the industrial and consumer sector, 31 were in the transport and transit and infrastructure sector, more than 50 were in the hospital and healthcare sector and 155 were in different varied sectors
3. BVG India’s greatest strength is their ability to integrate a wide array of services through one single contract
4. They aim to provide quality services and they ensure consistent standardized service levels
5. They have a very experienced and dedicated management team and skillful employee base
-
Risks
1. The company is subject to all labour legislations and regulations and any increase in the wages or training costs will affect the business
2. Potential operational risk could materially affect the reputation of the company
3. The BVG trademark is not owned by the company and they cannot control any usage of it and it may adversely affect their reputation
4. A large amount of revenue is derived from a few clients and any loss of those clients will lead to a huge loss in revenue
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