AGS Transact Technologies IPO: The first initial public offering, or IPO, of 2022 is set to close on Friday, January 21. The AGS Transact Technologies IPO, which opened two days back, was subscribed 1.42 times as of Day 2 of its opening mostly driven by the retail buyers category. The public offer came after a one-month gap at the primary market, following a year full of blockbuster issues at the Dalal Street with several companies making records through them. Bidders on Friday will have the last chance to book this issue. As of now, over 30 companies are already in line to open their IPOs, in a move to keep up the trend.
What AGS Transact Technologies IPO GMP Indicates
According to iPOWatch, the unlisted shares of AGS Transact Technologies was trading at a premium of Rs 15 at the grey market. This was around 8.5 per cent up from the upper end of its price band of Rs 175 per equity share. On Thursday, the AGS Transact Technologies IPO was giving a premium of Rs 10. Friday’s hike in GMP signalled that a few more bidders might be interested to book the issue. However, the weak grey market premium indicated tepid listing of the issue at the stock market next month.
IPO Details
AGS Transact Technologies Limited plans to raise Rs 680 crore through the issue, of which Rs 204 crore has already been raised through anchor investment. The entire issue only has an offer for sale, or OFS portion, and thus the company will not receive any proceeds from the IPO issue. The company has fixed the price band of the IPO at Rs 166 to Rs 175 per equity share. The issue might be listed o BSE and NSE on February 1.
AGS Transact Technologies IPO Subscription Status
As of Day 2 of the opening of the AGS IPO, investors booked 1.42 times of the shares up for sale, as per data with the Bombay Stock Exchange or BSE. This was mainly facilitated by retail buyers who subscribed to the first IPO of the year hours within its opening. The retail portion was subscribed by 2.06 times on Day 2 of the public issue.
AGS IPO Valuation
On FY21 financials, the IPO is valued at 6x EV/EBITDA and 1.5x EV/sales, compared to CMS at CMP trades at 14.5x EV/EBITDA and 3.3x EV/sales, accoridng to Reliance Securities. The Company is available at the upper end of the IPO price band, at 38.5x its FY21 earnings. The issue is priced at a P/BV of 3.7 based on its NAV of Rs 47.1, with a market cap of Rs.21,069 million, which we believe is quite reasonable, said Anand Rathi in a note.
Should You Subscribe?
Choice Broking: With ease in pandemic restriction, anticipating a ramp-up in ATM deployments by banks and further evolution in the digital payment space, we feel the company is well placed to benefit from its diversified product and services portfolio, varied customer base and multiple revenue streams. Thus we assign a “Subscribe for Long Term” rating for the issue.
Anand Rathi: While evaluating on the financial front at the upper end of the IPO price band the valuation seems to be reasonable, factoring all the above Scenarios, we assign “Subscribe- Long Term” rating to this IPO.
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