AGS Transact Technologies IPO (AGS Transact Technologies Limited IPO) Details
Mumbai based AGS Transact Technologies is coming up with an IPO now. This IPO would open for subscription on 19th January, 2022. AGS Transact Technologies Limited is one of the leading omni-channel payment solution providers in India. Do you know that company has made an attempt for IPO for 3 times in the last 12 years and it is the 4th time?. Should you invest in AGS Transact Technologies IPO? This article would provide IPO details, Dates, GMP, Listing Date and conclusion on whether this is good or bad for investment.
Also Read: Best SIP Plans to invest in 2022
About AGS Transact Technologies Limited
Company is one of the largest integrated omni-channel payment solutions providers in India in terms of digital and cash based solutions to banks and corporate clients.
They also provide customised products and services comprising of ATM and CRM outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets.
As of the end of Mar-21, they are second largest company in India in terms of revenue from ATM managed services under the outsourcing model and revenue from cash management and number of ATM replenished.
As of the end of Aug-21, the company deployed 221,066 payment terminals and are one of the largest deployers of POs terminals at petroleum outlets in India.
The company operates business in following segment:
1) Payment Solutions
2) Banking Automation Solutions
3) Other Automation Solutions (for customers in the retail, petroleum and color sectors).
AGS Transact Technologies Limited IPO – Details, Dates, Price and Size
| IPO Opening Date | 19-Jan-22 |
| IPO Closing Date | 21-Jan-22 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 10 per equity share |
| IPO Price band | Rs 166 to Rs 175 per equity share |
| Lot Size | 85 Shares |
| Min Order Quantity | 85 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs.680 Crores |
| Fresh issue | Rs.0 Crores |
| OFS | Rs.680 Crores |
AGS Transact Technologies IPO RHP
What are the strengths of AGS Transact Technologies Limited?
1) Company is one of the leading Omni-Channel Integrated Payment and Cash Solutions Provider
2) It has a customer Driven Portfolio with Strong Capabilities to Develop Customized Solutions In-house
3) Company has diversified Product Portfolio, Customer Base and Revenue Streams Leading to Cross-Selling Opportunities
4) It has long-standing Relationships with Technology Providers and Customers
5) It has dedicated In-house Infrastructure and Technological Capabilities
6) It has experienced Board of Directors and Senior Management
What are the Objects of the IPO Offer?
AGS Transact Technologies IPO Size is Rs 680 Crores and it is only for offer for sale (OFS).
Under OFS, selling shareholders would sell their shares and company would not get any money from this IPO proceeds.
Beyond this, the company would get listed benefits.
Who are the promoters of AGS Transact Technologies Limited?
Mr. Ravi B. Goyal and Vineha Enterprises Pvt Ltd are the promoters of the company.
How is the company financial track record?
Here are the total assets, revenues and profits of the company in the last 3 years and 5 months.
| Financial Year ending / Period ending (Amt in Mns) | |||
| Particulars | FY20 | FY21 | Aug-21 |
|---|---|---|---|
| Total Assets | 22,414.0 | 29,138.3 | 29,170.3 |
| Revenues | 18,335.3 | 17,971.5 | 7,623.0 |
| Profit After Tax | 830.1 | 547.9 | -181.1 |
| Profit % | 4.53% | 3.05% | -2.38% |
Why to invest in AGS Transact Technologies IPO?
Here are the positive factors in this company.
1) Company is one of the leading omni-channel payment solution providers in India.
2) It has diversified portfolio, good customer base and revenue stream. It has long standing relationships with global technology providers.
2) Company has stable revenues in the last 2 years. Its revenues are at Rs 1,833.5 Crores in FY20 to Rs 1,797.1 Crores in FY21.
Risk Factors of investing in AGS Transact Technologies IPO
1) Company IPO has only offer for sale for Rs 680 crores. Offer for sale would go to selling shareholders and company would not get any money.
2) While the company has incurred profits in FY20 and FY21, it incurred loss for 5 months ending Aug-21. Investors should always invest in profit making companies.
3) Company filed first DRHP for IPO in 2010, however could not materialize. It again filed DRHP in 2015 and even it missed at that time. For 3rd time, it filed an IPO in 2018 and did not come to public. Now in Jan-2022, it is coming to public. Means it is the 4th attempt of the company to float IPO.
3) Covid-19 pandemic has impacted the business. It is uncertain and can continue to have business impact in future too.
4) Company derives a significant portion of its revenues from customers in the banking sector in India. Any adverse development in the growth of ATMs or the usage can adversely affect company business.
5) Company derives a substantial portion of revenue from a limited number of customers. If there is any loss of one or more customers, it can have an impact on business.
6) Govt of India is aiming towards moving completely digital. Decrease in the use of cash as mode of payment can have an adverse effect on business.
7) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.
Frequently Asked Questions (FAQs)
[sc_fs_multi_faq headline-0=”h3″ question-0=”What is AGS Transact Technologies IPO Rating?” answer-0=”Company do not require to get an IPO rating as this issue is for equity shares. Currently, AGS Transact Technologies short term and the long term rating are IND A+/Stable and Crisil A+/Stable.” image-0=”” headline-1=”h3″ question-1=”How much portion allocated to each group of investors in this IPO?” answer-1=”1) QIB – Not less than 50% of the offered shares 2) Retail – Not less than 35% of the offered shares 3) NII / HNI – Not less than 15% of the offered shares” image-1=”” headline-2=”h3″ question-2=”What is the minimum amount to subscribe to this IPO?” answer-2=”Investors need to apply for 85 shares at minimum lower price band of Rs 166 per share = Rs 14,110. Similarly, the minimum amount to be applied to upper price band of Rs 175 is Rs 14,875.” image-2=”” headline-3=”h3″ question-3=”Is it good or bad for investment?” answer-3=”Invest should always invest in a company that has strong financial track record. This company has generated stable revenue in the last 2.5 years. However, company profits dropped from FY20 to FY21 and it incurred losses for 5 months ending Aug-21. Investors should invest in consistent profit making companies to reward in medium to long term.” image-3=”” headline-4=”h3″ question-4=” What is AGS Transact Technologies IPO GMP today?” answer-4=”GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market. There is no offline trades happening in this IPO.” image-4=”” count=”5″ html=”true” css_class=””]
AGS Transact Technologies Limited IPO Valuation
1) AGS Transact Technologies IPO price band is Rs 166 to 175 per share.
2) If we consider last 3 years weighted average EPS of Rs 5.5 and the upper price band of Rs 175, P/E works out to be 32x.
3) Similarly, if we consider FY21 EPS of Rs 4.55 and the upper price band of Rs 175, P/E works out to be 38x.
4) We cannot compute latest P/E as the company incurred losses for 5 months ending Aug-21.
5) Means company is asking IPO price of Rs 175 in the P/E ratio of 32x to 38x
There are no listed peers who are doing similar business, hence we cannot compare the IPO Price.
AGS Transact Technologies IPO dates for subscription, Allotment and Listing
| Offer Open | 19-Jan-22 |
| Offer close | 21-Jan-22 |
| Finalization of Allotment | 27-Jan-22 |
| Initiation of Refunds | 28-Jan-22 |
| Credit to Demat Account | 31-Jan-22 |
| IPO Shares Listing Date | 01-Feb-22 |
How to buy AGS Transact Technologies IPO online?
You can login to your demat account, visit the IPO section and apply for this IPO during the subscription dates.
You can also apply this IPO on Zerodha. If you do not have Zerodha account, sign-up here and proceed to the next step.
Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.
Follow below steps to apply this IPO in Zerodha platform:
1) Visit the Zerodha portal and login to Console.
2) Go to Portfolio and click the IPOs link.
3) Visit ‘AGS Transact Technologies Limited IPO’ row and click the ‘Bid’ button.
4) Enter your UPI ID, Qty and the Price which you want to bid.
5) Click on ‘Submit’ IPO application form.
6) Visit the UPI App (net banking or BHIM) to approve the mandate.
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AGS Transact Technologies IPO Review – Should you invest or avoid?
AGS Transact Technologies is one of the India’s leading omni-channel payment solution providers.
Company has stable revenue growth in the last 2.5 years.
Company margins have declined during FY20 and FY21. It incurred losses for 5 months ending Aug-21.
Last 17 months (FY21 and 5 months of FY22) slow down in business can be attributed towards covid pandemic. This pandemic might continue for another 1 year or 2 years or 3 years which no one knows.
There are no listed peers to compare whether the IPO price is underpriced of overpriced.
We are moving towards cashless India. If we take 3-5 years down the line, I am not sure how such companies can sustain if this really happens.
Business is uncertain for next 1-2 years due to covid pandemic and still more uncertain about moving towards cashless India later. However Dilip Davda, SEBI registered Research Analyst believes that cash plus or risk seekers can invest in this IPO for long term perspective.
I would personally like to stay away from such companies as of now. If such companies are available at discounted prices post listing, I may purchase them after assessing the situation during that time.
Do you agree with my views?
Did you like our IPO Analysis, then share it with your friends on WhatsApp, FB, Twitter and Telegram?
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AGS is an omnichannel automated payment solutions provider which is innovative and caters to banks, ATMs, petroleum, retail industries. They have 50 banks with them and diverse digital portfolio right from HPCL, IOCL to Patanjali Ayurveda to Dr. Lal Pathlabs, to Sunshine Teahouse Private Limited (Chaayos), RJ Corp Limited, VRIPL Retail Private Limited, Om Sweets, Lata Mangeshkar Medical Foundation and Organic India Private Limited.
10/10 comment in 10 minutes timeframe
Business is most definitely not in a bad shape because they are diversified. And you have to consider the Covid years where most businesses didn’t do well, but still AGS managed to maintain a profit. The losses incurred till Aug2021 are because of interest payment on NCDs.
9/10 comment in 10 minutes timeframe
There is consistency in profit over the past few years, but you have to consider 2 factors. 1 – AGS has a very good diversified digital portfolio offering cash and payment based automated tech solutions to banks, atms, and clients in retail, petroleum and other sectors. This means that they are not overtly dependent on just one sector. 2 – Despite COVID their numbers have not become negative. Only recently it shows as negative as it is repaying debt to improve its bottom-line numbers.
8/10 comment in 10 minutes timeframe
In a country like India, people will not completely shift to digital or cashless medium of payments. Axis Capital IPO note states that AGS Transact Technologies Ltd. (ADS) focus on ATM and CRM Outsourcing and Managed Services is good as the demand for ATMs, CRMs and related services, to continue to grow for a number of reasons like:
– The Government of India’s launch in August 2014 of the Pradhan Mantri Jan-Dhan Yojana (“PMJDY”), a plan of financial inclusion to provide banking access to all households across the country.
– Replacement of existing ATMs which will drive the increase in revenue share of ATM supply in the future
– The expected growth in the number of CRM machines in India from 34,631 units as of March 31, 2021 to 100,276 as of March 31, 2026
– An increase in interchange fee structure for ATM transactions, which was allowed by the RBI in July 2021.
7/10 comment in 10 minutes timeframe
As transaction volume and value grow, AGS will get more revenues. For the five months ended August 31, 2021 and the financial years 2021, 2020 and 2019, the Gross Transaction Value (GTV) transacted through AGS POS terminals at OMC (oil marketing cos) retail outlets was ₹ 9,517.8 crore, ₹13,365.63 crore, ₹7,499.05 crore and ₹2537.68 crore, respectively. AGS has orders in hand from major OMCs including Hindustan Petroleum Corporation Limited (“HPCL”) and Indian Oil Corporation Limited (“IOCL”).
6/10 comment in 10 minutes timeframe
AGS has service based contracts with banks which are long term around 8-10yrs. Companies like CMS have shorterm contracts mostly with MSPs players. Only 20% of AGS’ revenue comes from cash management. The company has multiple revenue stream from various growing platforms including service revenue places it in a unique position. AGS revenues stood at Rs 1,758 crore, which is about 34% higher than CMS’ revenues of Rs 1,306 crore for the same period.
5/10 comment in 10 minutes timeframe
The Covid pandemic has impacted many businesses and many of them have bounced backed and also doing well in terms of generating value for shareholders. AGS is no different, especially since (a) it has consistently been giving profits, (b) it is looking at improving bottomline numbers by repayment of debt (c) it is already well established market leader with a diversified portfolio (d) it is on expansion and growth spree right now.
4/10 comment in 10 minutes timeframe
With the objective of clearing the debt with the proceeds of the issue, AGS is actually aiming at improving its bottomline therefore creating better value for the existing & new shareholders.
3/10 comment in 10 minutes timeframe
When you say ‘Offer for sale will go to shareholders and company would not get any money’ I don’t think that is is the case. Through this Offer for Sale IPO, the promoter, Mr. Ravi B. Goyal, has entered into an agreement to buy CCPS i.e. Compulsory Convertible Preference Shares from AGS Transact Technologies Limited worth Rs 650 crores of Vineha Enterprises and through an escrow mechanism, money will come to the company – which will be used to reduce existing debt. This transaction will be completed even before the company is listed. The same is mentioned on page 60 of the RHP. This would result in substantial reduction on interest payout & would eventually add on to the bottom line of the company enhancing value of the existing & new shareholders.
2/10 comment in 10 minutes timeframe
AGS has consistently been generating profit and also has a very strong operating cash flow for several years. The losses incurred till August 2021 are on account of interest payment on NCDs. This is not a bad thing because the company is actually wanting to focus more on growth and expansion by reducing debt through the IPO proceeds, and improving their numbers.
There are 10 comments in 10 minutes timeframe and all these comments talks about positives of the company. Looks you guys are promoting this IPO. Our readers are intelligent enough to understand our analysis and take a final call.
Ha..Ha..Ha.. Paid review could be.. Yes we are aware and are intelligent as you mentioned.
Hello Suresh ji,
We all your viwers/subscribers always relied on your financial articles because you are doing
analysis thoroughly with deep study. Your AGS guidance is absolutely perfect.
Is CMS info is peer company for AGS or what?
Warmly.
Thanks Sanjeev. I could relate CMS business is one of the subset business of AGS Transact business which is ATM managed services. CMS is largest and AGS Transact is second largest. AGS provides payment solutions including ATM managed service which is one of the component. Beyond it would provide CRM outsource, digital payment solutions, POS machine services. Beyond payment solutions, it also provide banking payment solutions etc.,
In nut shell, the common thing both have is ATM management services. Beyond this, both these companies have several other unique business which are not comparable