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Spectrum Talent Management IPO comprises a fresh issue of 51.85 lakh equity shares and an Offer for Sale (OFS) of 8.92 lakh equity shares. Spectrum Talent Management IPO entails to raise Rs 105.14 crore . The price band for the issue has been set at Rs 169 to Rs 173 per share. Headquartered in Delhi, Spectrum Talent Management Limited is a leading manpower solutions provider in India, offering a wide array of services such as recruitment, payroll, onboarding, and flexible staffing.

About Spectrum Talent Management:

• Spectrum Talent Management offers a wide array of services such as Recruitment, Payroll, Onboarding and flexible staffing. It meets the clients’s staffing, and recruitment needs globally through specialized rich knowledge.
• Company also started business of export of electronic products 2 years back but may discontinue it.
• Company was incorporated on May 09, 2012 as a private limited company.
• Driven by the passion for building an integrated staffing company, backed by their experience, our Promoters have been the pillars of our Company’s growth and have built a strong value system for our Company. With their enriching experience and progressive thinking, we aim to continue to grow in the staffing industry.
• It serves to more than 275 clients in domestic and offshore markets. As on December 31, 2022, it has15,606 personnel deployed at various locations for clients.
• It has a wholly owned subsidiary namely STM Consulting Inc. majorly operating in the USA. Further, it has 90% subsidiary namely STM Consulting Limited, majorly operating in the UK. Both the entities are engaged in the business of employment placement agencies, Temporary employment agency activities and Human resources provision and management of human resources functions.
• Our substantial talent pool and deep understanding of the hiring industry has helped us achieve significant strides in the HR market.
• We keep on exploring new lines of businesses, in the process the Company came across the business of export of electronic products. It is in process of closing trading vertical of electronic goods export in due time.
• As on December 31, 2022, Spectrum Talent Management had 382 employees overall. The manpower is a blend of experienced and young people that gives it the dual advantage of stability and growth, whereas execution of services within time and quality.

Department wise breakup of employees:

• Mr. Sidharth Agarwal and Mr. Vidur Gupta are the Promoters of the company.
• Industry wise Bifurcation of Staffing Employees Deployed by the Company.

Spectrum Talent Management Offerings:

• A. General Staffing : STM is a proven Third Party Payroll provider to meet the manpower staffing demands on the fly. Services Offered Under General Staffing are:
  • Flexi Staffing: provide clients with manpower required by them as per their need and for a specified period. These associates are deputed to the client site and are on STM payrolls. STM takes care of the entire employee life cycle right from the hiring formalities and documentation, monthly attendance, payroll & Compliance management and to the off boarding of the associate.
  • Industrial Staffing: STM experienced Industrial staffing team helps clients in identifying the correct resource for their industry specifically for manufacturing setups. STM has a huge database of candidates & Pan India tie ups with colleges & NGOS reduce the shortage of relevant manpower.STM has deployed till date various resources with various qualifications: Degree Engineers, Diploma Engineers, ITI Technicians, Production Staff, Managerial Staff etc.
  • Apprentice Solution: STM is a registered TPA from 2021 for the Apprentice Program Regulated by the Central Govt. – NAPS (National Apprenticeship Promotion Scheme) managed by Ministry of Skill & Development & NATS (National Apprenticeship Training Scheme) managed by Ministry Of Education.
  • Payroll Management
  • Compliance Management: Comprehensive range of services like compliance audit, gap analysis, solution recommendations, registrations, renewals and records maintenance.
• RPO (Recruitment Process Outsourcing- Permanent Recruitment): Permanent recruitment is a service where STM provides clients with talent to be hired on their payroll with a one-time placement fee. STM provides this service both in India and Globally. STM provides recruitment solutions through our Information Technology (IT), ITES. Telecom, Semi conductor, Automobile, Life science, FMCG, C&A and BFSI team of experts.
  • Sourcing of Staff/Associates.
  • IT Permanent Hiring Vertical: STM has segregated IT vertical to 2 Sub Vertical- IT Service & IT Captives.
    • IT Service Permanent sub-vertical: STM is catering to technology’s hiring with expertise in below areas:
      • IT Infrastructure – e.g. Storage, Server, Tool etc
      • Information Security
      • Frontend and backend
      • ERP – e.g. SAP, Oracle Apps, Dynamics365
      • UI/UX
      • Testing /QA
      • MI & AI
      • Development- DB, Web, Programming
      • Cloud and Computing
    • IT Captives Permanent sub-vertical: In IT captive vertical, it provides recruitment support to IT Product industry, IT Captive industry (BFSI), E-Commerce, Start- up, Education and entertainment. It has expertise in SDE (Software Development Engineer), Product Engineering, Data Scientist, Data Engineering, AI/ML, Cloud, Emerging Technologies, DevOps
  • Telecom Permanent Hiring Vertical: STM is catering to telecom customer’s hiring with expertise in End to End infrastructure support, Telecom Application Development, L1, L2, L3 Support (Level 1, Level 2, Level3), 3G, 4G, 5G Protocol Engineers, VAS (Value Added Services), GNOC (Global Network Operations Centre), Network Compliance, AMC Management, Tower Management.
  • Semiconductor Permanent Hiring Vertical: This vertical caters to roles in the semiconductor industry including working in various aspects of chip design and verification.
  • Life science Permanent Hiring Vertical: STM is catering to across life science industry such as Pharmaceutical, chemical, biotech, and devices
  • Automobile Permanent Hiring Vertical: The vertical caters to the 2 Wheeler, 3 Wheeler, 4 Wheeler, Commercial vehicles, construction equipment and tractor industries.
  • FMCG Permanent Hiring Vertical
  • ITES Permanent Hiring Vertical
  • BFSI Permanent Hiring Vertical: in areas like Retail Banking, Wealth Management, Corporate Banking, Securities, Broking, Asset Management Companies, investment Banking, Insurance, leasing & Equipment Finance, commodities & Forex trading.
  • C & A Permanent Hiring Vertical- areas like Assurance &Taxation, Risk Consulting, Cyber Security, Transaction Advisory Service, IT Consulting &Operation
• Global HR Services: This vertical is based on leveraging the cost differences in delivering services in the international markets using India as a base. There are 3 offerings here:
  • global local recruitment: provide locally available talent to companies in multiple countries giving them the added advantage of dealing with 1 vendor for multiple geographies.
  • US Staffing: deploy locally available talent in the US and North America
  • Remote workforce

Spectrum Talent Management IPO: Financials

Spectrum Talent Management IPO: Salient Points

• Promoters holding is 100% at present and shall stand at 73.68% post IPO.
• Staffing industry added new employment at 21.9% YoY (2021-22), compared to a 3.6% new employment generated in the previous year. General Staffing Industry net new employment grew at 21%, adding 1.57 lakhs new formal workforce, from the year before at 18.1%.General Staffing Industry was primarily driven by demands from FMCG, E-commerce, Manufacturing, Healthcare, Retail, Logistics, Banking, Energy etc.
• Top 10 customers contributed 63.23%, 67.09% and 73.31% of our revenues during the financial year 2021-22, 2020-21 and 2019-20 respectively, whereas, top five customers contribute 47.07%, 52.28% and 51.20% of revenues during the financial year 2021-22, 2020-21 and 2019-20 respectively.
• As of March 2022 and December 2022, it generated revenue of Rs. 10,064.29 lakhs & Rs. 20,165.41 lakhs respectively from export of Mobiles. company is likely to discontinue the electronics exports business in the future to focus on the core HR Services business..

• s on nine months ended December 31, 2022, we had total outstanding borrowings of Rs. 255.09 Lakhs.

• Industry Wise Bifurcation of Revenue from Core business (INR in lakhs)

• Its Subsidiary STM Consulting, Inc. provides comprehensive Professional Services and IT Outsourced services across North America. The solutions offered include Flexible Staffing, Managed Services, Contingent Recruitment, Contract Staffing, Executive Search, Global Recruitment, IT Staff Augmentation, On-boarding and Payroll.
• Spectrum Talent Management Ltd. is providing resources on Contract and Fulltime basis to various State Governments in the United States and to multiple Private sector organizations in the fields of Pharmaceuticals, Healthcare, Manufacturing, Banking and Financial Services and IT.
• STM has high client retention across industries which include NBFC’s, BFSI, Retail, Telecom, E- commerce, FMCG, FMCD, Logistics and others.
• The company intends to utilize the Net IPO Proceeds for the following objects
• Spectrum Talent Management Ltd. competes in international, national and regional markets with both full-service and specialized temporary staffing companies. A majority of its competitors in terms of revenues and number of Associate Employees, several competitors, including the Indian affiliates or India-based operations of global players such as Adecco S.A., Manpower Inc., Randstad Holding N.V. and Kelly Services, Inc. and Indian human resources companies such as Quess Corp Limited, TeamLease Services Limited and Firstmeridian Business Services Limited.
• Peers

• Quess and Team lease are much bigger companies than Spectrum Talent Management.
• Aarvi eincon is of comparable size as some portion of Spectrum Talent Management revenues comes from mobile exports which they are going to stop. Aarvi Eincon which is more into engineering manpower for refineries etc is trading at a lower PE.
• Market cap/sales of Spectrum appears to higher side though it enjoys better NPM than Quess and Teamlease.
• Its PE ratio is 15x (fy23 earnings). There has been a growth in revenues and profits from the last few years.
• Sarthi Capital Advisors  as a lead ,m,anager has a reasonable record. Managed issues like Homesfy Realty Limited, Frog Cellsat Limited, P. E. Analytics Limited, Marvel Decor Limited, Servotech Power Systems, Aarvi Encon Ltd, Vivo Collaboration Solutions Ltd, Brand Concepts Limited etc. with a reasonable to very good listing performance.
• If I apply in Spectrum Talent Management IPO, it will be on last day only after assessing good overall response to IPO. Looks like an average issue though downside should not be much. Listing gains if any may be limited.
• The issue size is relatively large in the SME segment. Infact this is the biggest SME IPO. Further there are neither any anchor investors and only 10% is marked for QIBs for reasons that are not clear.
• GMP as reported on social media has been moving down and may be in Rs. 15-18 range.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.