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Updater Services IPO envisages to raise Rs 640.00 crores. The issue is a combination of fresh issue of Rs 400.00 crores and offer for sale of 0.8 crore shares aggregating to Rs 240.00 crores. Updater Services Ltd, offers facility management services and business support services.

About Updater Services;

• Updater Services Ltd, was incorporated in 1990 to offer facility management services and business support services.
• Updater Services is a leading, focused, and integrated business services platform in India offering integrated facilities management (“IFM”) services and business support services (“BSS”) to its customers, with a pan-India presence. (
• It is the second largest player in the IFM market in India and have the widest service offering in the industry, making us a unique and differentiated player in the market.
• Its portfolio of services has evolved over the years to cater to diverse customer segments across sectors including FMCG, manufacturing and engineering, BFSI, healthcare, IT / IteS, automobiles, logistics and warehousing, airports, ports, infrastructure and retail, among others.
• Within our BSS segment, it offers Audit and Assurance services through our Subsidiary, Matrix and according to F&S Report, Matrix is a leading Audit and Assurance company for dealer / distributor audits, and retail audits and its strong branch reach and field associate reach has driven the company to reach the top spot in India, with a market share of 19.2% in the Financial Year ended March 31, 2023.
• It also offers employee background verification check services through Matrix and in this segment, Matrix is the third largest company in India in this segment with a share of 5.4% in the Financial Year ended March 31, 2023. (Source: F&S Report) In addition, it provides sales enablement services through our Subsidiaries Denave and Athena. Denave is the largest player in this segment with a market share of 20.1% in India in the Financial Year ended March 31, 2023.
• In addition, Updater Services offers mailroom management services through our Subsidiary, Avon which is a market leader in India with a share of 11.1% in the mailroom management services market in the Financial Year ended March 31, 2023.
• Updater Services Ltd caters to more than 2,797 customers across various sectors, with customers straddling domestic and global markets. S It operates across India through a network of over 4,331 locations. These exclude staffing locations; and the entire logistics are managed from 129 points of presence with 116 offices situated in India and 13 offices abroad.
• Company’ operations are manpower-heavy with over 65,000 employees on its rolls.
• Promoters are Raghunandana Tangirala, Shanthi Tangirala and Tangi Facility Solutions Private Limited.

Financials: Updater Services IPO

Anchor

Updater Services IPO: Salient Points

• Updater Services Ltd predominantly operates in the Business-to-Business (B2B) services space offering a range of business services.
• The company is a 2nd largest player in integrated facilities management (IFM), which includes soft services, production support services , engineering services, washroom and feminine hygiene care has contributed 72% of the total revenues. This segment has l,ower margins.
• The other sector it operates is business support services to customers. This accounts for rest 28%. This segment has higher margins.
• Some of its premium customers include Procter & Gamble, Aditya Birla Fashion and Retail Limited, Microsoft India, Hyundai Motors India, Saint-Gobain India etc. It manages its operations through offsite and onsite offerings based on the requirement of the customer.
• Selling share Holders

• The proceeds of the fresh issue portion will be used to repay / prepay outstanding loans availed by Updater Services Ltd and for pursuing inorganic initiatives. The company will also use the funds partly for working capital needs.
• It has demonstrated its ability to manage and grow their operations across segments including inorganic route.
• Company’s revenue has grown at 17% CAGR between FY20 to FY23 to Rs. 2,100 cr and this is driven mainly by acquisitions.
• Company’ operations are manpower-heavy and it is accompanied with very heavy attrition rates.
• Updater Services IPO is coming at a PE ratio of 58x(fy23 earnings).
• Company has stated Quess Corp Ltd, SIS Ltd, and Team Lease as its listed peers. They are quoting at much lower PE than Updater Services.
• only 10% of IPO is for retail as tangible assets of Updater Services are low
• I do not intend to apply in Updater Services IPO at this stage due to slightly streched valuations and overcrowding of IPOs. .
• GMP as reported on social media is NIL.

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.