Radiant Cash Management Services Ltd IPO

Upcoming DRHP

IPO Synopsis

Radiant Cash Management Services Ltd filed a draft red herring prospectus with SEBI to raise funds via IPO. The IPO done via fresh issue of shares is worth Rs.60 crores and an offer for sale of up to 30.13 million shares by its existing promoters and shareholders.
The OFS comprises issue of up to 10.13 million shares by Col David Devasahayam and up to 20 million shares by Ascent Capital Advisors India. Devasahayam hold 54.40% stake in the firm while Ascent Capital has 37.221% stake in the firm.
In August 2021, the outstanding amount for working capital under fund-based and non-fund based stood at Rs. 21.42 crore and Rs. 21.02 crore respectively.
 
IIFL Securities, Motilal Oswal and Yes Securities are the lead managers to the issue.


Objective of the issue

The proceeds from the issue will be used for the following:
1. Rs.20 crores will be used for funding working capital requirements which in August 2021, the outstanding amount stood at Rs.21.42 crores for fund-based and non-fund based stood at Rs.21.42 crore and Rs.21.02 crore respectively.

2. Rs.23.92 crore will be used for buying 220 specially fabricated armoured vans. As of July 2021, it has utilised a fleet of 694 fabricated armoured vans.
 

About Radiant Cash Management Services Ltd

The firm is an integrated cash logistics player in retail cash management (RCM) segment of the cash management services industry in India and is one of the largest players in the RCM segment in terms of network locations or touchpoints served.

The firm provides services across 12,150 pin codes in India covering all districts (other than Lakshadweep) with about 42,420 touch points serving more than 4,700 locations.
The firm’s marquee clients include some of the largest foreign, private and public sector banks, and the end user of the services include some of the largest e-commerce companies, retail chains, NBFCs, insurance firms, ecommerce logistics players, railways and retail petroleum distribution outlets.

The business operates across five verticals: 
1. cash pick-up and delivery
2. network currency management (also known as cash burial in industry parlance)
3. cash processing
4. cash vans /cash in transit
5. other value added services

The integrated services and product offerings allows to shift business mix towards providing more value-added services, more reliable service through a single point of accountability, improved advance planning of routes, faster reconciliation, as well as increased client loyalty and reduced client turnover. Due to these, the company enjoys leading EBITDA margin, ROCE and ROE amongst organised players in the cash management services segment in 2020. EBITDA margin for Fiscal 2021 stood at 22.20%, FY 2020 stood at 22.15% and FY 2019 stood at 18.46%.
 

Particulars

FY21

FY20

FY19

Revenue

221.67

248.28

220.92

EBITDA

49.76

55.77

41.20

PAT

32.43

36.50

25.02

EPS (basic in Rs.)

3.2

3.6

2.47

ROE

25.52%

30.53%

23.66%

ROCE

33.33%

37.91%

31.31%

 

Particulars

FY21

FY20

FY19

Total Assets

162.14

157.62

141.44

Share Capital

1.03

1.11

1.11

Total Borrowings

11.05

21.13

17.73

 

Particulars

FY21

FY20

FY19

Net cash generated from / (used in) operating activities

270.85

401.29

139.69

Net cash from / (used in) investing activities

256.5

57.67

-243.11

Net cash flow from / (used in) financing activities

-368.84

-219.52

199.1

Cash and cash equivalents at the end of the Period / Yea

537.75

379.24

139.8

 

Peer Comparison:-

Name of the company

Total Revenue (in Rs. crores)

Basic EPS

NAV Rs. per share

PE

RoNW %

Radiant Cash Management

224.16

3.2

12.55

NA

25.52%

SIS Limited

9,605.10

24.85

123.45

19.9

20.06%


Key Points of Radiant Cash Management Services Ltd IPO - 

IPO Key Points

  • Strengths

    1. Leading integrated cash logistics player in a consolidating industry present across the value chain of retail cash management.

    2. Pan India presence with strong network in Tier 2 and Tier 3+ locations and fast growing end user segments.

    3. Diversified client base with long standing relationship and ability to cross-sell value added services.

    4. Robust Operational Risk Management.

    5. Significantly built up technology to optimise operational profitability.

  • Risks

    1. The business is highly dependent on the banking sector in India to generate revenues, and any changes within Indian banks that affects their utilisation of and demand for cash management services could affects the business and its operations.

    2. If one or more of the key customers were to suffer a deterioration in their business, cease doing business or substantially reduce its dealings with the, the revenues could decline.

    3. A decrease in the availability or use of cash as the predominant mode of payment in India could have an adverse effect on the business as cashless payments system gains traction.

    4. The currency demonetisation measures had a significant impact on the cash circulation in India and there is uncertainty whether similar unanticipated measures could be adopted, hence the future remains unpredictable.

    5. Given the large volumes of cash handled, the firm are exposed to various operational risks, including armed robbery, endcustomer or third-party fraud, theft or embezzlement by employees or, reporting errors, both deliberate and inadvertent, and failure to meet specific requirements under applicable service agreements for which we may incur penalty charges.

How to apply for IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

IPO FAQs

What is the minimum lot size and investment required for the Radiant Cash Management Services IPO?

Radiant Cash Management Services IPO details are yet to be announced.

What is the price band of the IPO?

Radiant Cash Management Services IPO details are yet to be announced.

When does the Radiant Cash Management Services issue open and close?

Radiant Cash Management Services IPO details are yet to be announced.

What is the allotment date of Radiant Cash Management Services?

Radiant Cash Management Services IPO details are yet to be announced.

What is the Radiant Cash Management Services listing date?

Radiant Cash Management Services IPO details are yet to be announced.

Who are the book runners for Radiant Cash Management Services IPO?

IIFL Securities, Motilal Oswal and Yes Securities are the lead managers to the issue.

What is the objective of the issue?

The proceeds will be used for

1. Funding working capital requirements.
2. Funding of capital expenditure requirements for purchase of specially fabricated armored vans.
3. General corporate purposes.

How to apply for the Radiant Cash Management Services IPO?

To apply for the IPO, follow the steps given below

1. Login to your 5paisa account and select the issue in the current IPO section
2. Enter the number of lots and price at which you wish to apply for
3. Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
4. You will receive a mandate notification to block funds in your UPI app