Updater Services IPO Date, Price, GMP, Review, Details

Updater Services Limited is an 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.

OBJECTS OF THE ISSUE

• Payment of certain borrowings.
• Funding the working capital requirements. Pursuing inorganic initiatives.

Raghunandana Tangirala

Promoter, Chairman and Managing Director of the Company. He is one of the founding directors of the Company and has been on the board since its incorporation. In the Company, he focuses primarily on corporate governance, organizational development, capital allocation and strategic growth of the Company. He has approximately 30 years of experience.

C. R. Saravanan

Director of business operations of the Company. He has been associated with the Company since October 3, 2016. In the Company, he handles the pan India business operations.

Balaji Swaminathan

Chief Financial Officer of the Company. He has been associated with the Company since December 11, 2019. He handles finance & accounts and compliances of the Company. He holds a bachelor’s degree in commerce from University of Madras. He is an associate member of the Institute of Chartered Accountants in India.

Ravishankar B

Company Secretary of the Company. He has been associated with the Company since March 6, 2023. In the Company, he is responsible for secretarial compliances. He holds a bachelor degree in commerce from the University of Madras. He is an associate member of the Institute of Chartered Accountants of India and an associate member of the Institute of Company Secretaries in India.

COMPANY PROFILE

• Updater Services Limited commenced operations in 1990 as a housekeeping and catering services company situated in Chennai, Tamil Nadu.
• Over the years, it has evolved into an integrated business services platform with a pan-India presence serving customers across industries and business service lines.
• In IFM other service segments include Production Support Services, Soft Services, Engineering Services, Washroom and feminine hygiene, Warehouse management, General Staffing, and more. In the BSS segment, the company offers Audit and Assurance services, employee background verification check services, airport ground handling services, sales enablement services, and more through its subsidiaries.
• All these services are B2B services which are primarily in the nature of annuity-based services whereby the customer, once acquired, generates revenue over an extended period of time.
• It served 2,797 customers across various sectors, including certain marquee global and Indian customers.

COMPETITIVE STRENGTHS

• Leading integrated business services platform, operating across diverse segments. Longstanding relationship with customers across diverse sectors leading to recurring business. Track record of successful acquisition and integration of high-margin business segments.
• Pan India presence with a large and efficient workforce. Technology at the forefront of its current and future business.
• Highly experienced Management team with support from PE Investors.

KEY STRATEGIES

• Retain, strengthen, and grow customer base. Grow market share in key segments.
• Introduce new products and services catering to existing and new customer segments. Pursue inorganic growth through strategic acquisitions.
• Continue to improve operating margins.

KEY CONCERNS

• The Company employs a large workforce of 65,627 employees as of June 30, 2023, thus it faces significant employee-related regulatory risks.
• Operational risks, as it provides services in different business environments.
• It witnessed a reduction in its profit in the Financial Year ending March 31, 2023. Any delay or default in receiving payments for services rendered by the Company.
• The Company is exposed to service-related claims and losses or employee disruptions that could have an adverse effect on its business.
• The industries in which it operates are intensely competitive.
• Certain of the services that it offer to its customers are subject to seasonal variations.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

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OUTLOOK & VALUATION

Updater Services Ltd. (UDS) is a leading business services platform that offers a diverse range of services to customers (B2B) across diverse sectors. The company has a pan-India presence and a large workforce.

The financial performance of the company has been mixed, with growing revenue but declining profit. The company faces certain regulatory and operational risks due to the nature of its business. It is also exposed to service-related claims and losses.

Lastly, the issue is priced at a P/E of 44.3x, which is significantly higher than its listed peers. Thus, considering all the factors, we will avoid this IPO.

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