Security and Intelligence Services (SIS) made a reasonable debut on Thursday with shares getting listed at Rs 879.80 on NSE which is at a 7.95% premium as compared to its issue price of Rs 815.
Security and Intelligence Services (SIS) made a reasonable debut on Thursday with shares getting listed at Rs 879.80 on NSE which is at a 7.95% premium as compared to its issue price of Rs 815. The stock has been admitted to the dealings on BSE in the list of ‘B’ group of securities. On BSE, the stock opened 7.4% higher at Rs 875 against its issue price. SIS India (Security and Intelligent Services) Ltd’s Rs 780 crore IPO opened for bidding for public investors between 31 July and 2 August at a price band of Rs 805-815 per share was oversubscribed 7 times.
Qualified institutional buyers (QIBs) portion was subscribed 5.64 times, non-institutional investors 1.66 times and retail investors 19.51 times. The security staffing company planned to raise up to Rs 362.25 crore in fresh capital by issue of fresh equity shares in the IPO, while the remaining portion of the issue comprises an offer for sale of up to 51.2 lakh equity shares by the existing shareholders.
The company provides private security and facility management services in India and Australia. It also provides cash logistics services, including automated teller machine cash replenishment. While the high growth potential of the security services industry in India, and especially SIS Ltd’s outperformance on top of the industry growth might make the issue attractive, some investors might want to exercise caution given the high valuations, with the company’s share price asking for a P/E multiple (price-earning ratio) of as much as 65x.
SIS earns over 85% of its revenue from providing security services to offices, commercial complexes, banks and more. Of this revenue, it earns about 65% from an Australian subsidiary. The remaining part of its overall revenue is earned through fast-growing cash logistics and facility management services. The company has 251 branches in 124 locations in India. It employs about 150,000 people across the country.
A well over half the IPO proceeds, at about Rs 418 crore, will go to the existing shareholders selling their equity stake in the public issue. From the remaining amount of fresh capital — Rs 362.25 crore — being accrued to the company, about Rs 200 crore will be used to pay off debt; Rs 60 crore will be deployed to replenish working capital, and the remaining will be used for general corporate purposes. Of the total IPO quota, 15% of is being offered to HNIs and 10% is being offered in the retail category.
IIFL Holdings, ICICI Securities Limited, Axis Capital and Kotak Mahindra were the global coordinators and book running lead managers to the offer.