BLS E-Services IPO subscribed 89x on day 3 so far; NIIs portion booked over 205 times

The initial public offering (IPO) of BLS E-Services continued to receive a robused response from the investors during the third and final day of the bidding process, majorly from retail and non-institutional investors. The issue was booked about 16 times on day one and ended day two with 43 times bidding. The New Delhi-based BLS E-Services is selling its shares in the price band of Rs 129-135 apiece with a lot size of 108 shares and its multiples thereafter. The issue is entirely a fresh sale of up to 23,0,30,000 equity shares. The company is looking to raise a total of Rs 310.93 crore via IPO. According to the data, the investors made bids for 1,21,53,26,268 equity shares, or 88.69 times, compared to the 1,37,02,904 equity shares offered for the subscription by 13.40 pm on Thursday, February 1. The three-day bidding for the issue, which had kicked-off for bidding on Tuesday, January 30, concludes today, that is February 1, Thursday. The allocation for retail investors was subscribed a whopping 192.54 times, while the portion reserved for non-institutional investors saw a subscription of 205.40 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for 24.83 times and the portion reserved for BLS International shareholders was booked 12.20 times as of the same time. Incorporated in April 2016, BLS-E Services is a digital service provider that offers business correspondence services to major banks in India, assisted E-Services, and E-Governance services at the grassroots level in India. They are the three key categories of its services in the country. Brokerage firms are mostly positive on the issue citing its strong financial performance, asset light model, deep rooted network in the pan-India market and service sector nature of the business. However, rich valuations and rising competition are the major drawbacks for the IPO. Considering the FY-23 annualized EPS of Rs 2.24 on a post-issue basis, the company is going to list at a P/E of 60.33 times with a market cap of Rs 1,226.6 crore, whereas its peers namely EMudhra is trading at a P/E of 57 times, said Marwadi Financial Services. "We assign a 'subscribe' rating to this IPO as the company has an asset-light business model with diverse sources of revenue and negligible customer acquisition and retention costs. Also, it is available at a reasonable valuation as compared to its peers," it added. Ahead of its IPO, BLS E-Services raised Rs 126 crore from ten anchor investors as the company allotted 93.27 lakh shares at Rs 135 per shares. The IPO has reserved 75 per cent of the net offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 10 per cent allocated to retail investors. BSL Eservices remains a key beneficiary of the rapid acceptance banking and digitisation in urban as well as rural India a trend that should accelerate further over the next 3-5 years enabling the company to clock healthy growth rates similar to 50 per cent that the company has cocked in the past, said SMIFS. "The company is expected to clock on the back of already established presence and acquisitions alongwith the impact of the issue proceeds being deployed over the next 2 years, we believe that this company could have very high growth prospects over the next 5-6 years with equally strong return ratios," it added with a 'subscribe' tag as a decent long rem investment.  

Unistone Capital is the sole book running lead manager of the BLS E-Services IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with February 6, 2024, Tuesday, as the tentative date of listing at the bourses. 

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