InvestorQ : Can you tell me about the AGS Transact IPO and when the IPO is opening? Can I invest in the IPO?
Arusha Ray made post

Can you tell me about the AGS Transact IPO and when the IPO is opening? Can I invest in the IPO?

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4 months ago
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Let me first give you quick background about the AGS Transact Technologies IPO. The company is a leading omni-channel payment solutions provider. It broadly operates in 3 business verticals viz. payment solutions, banking automation solutions and retail automation solutions. Payment solutions is the largest chunk of its business or nearly 75%. AGS IPO of Rs.680 crore will be entirely an offer for sale

Out of the total Rs.680 crore IPO, promoter Ravi Goyal will sell 387.19 lakh shares valued at Rs.677.58 crore at the upper price band of Rs.175. that is almost the entire IPO with 5 other sellers offering total shares worth Rs.2.42 crore. There will be no fresh funds coming into the company and the purpose of the OFS is to get the company listed on the stock exchanges to help realize market valuations.

The IPO price band for the IPO has been set between the range of Rs.166 and Rs.175 per share. The market lot will be of 85 shares and retail investors can apply for a bare minimum of 1 lot and maximum of 13 lots with a peak investment permitted of Rs.193,375 crore. The IPO opens for subscription on 19th Jan 2022 and closes for subscription on 21st Jan 2022.

The IPO has decided to allocate 50% to QIBs, 15% to HNIs and 35% to retail investors in this issue. Once the IPO closes on Friday 21st January, the basis of allotment will be finalized on 27-Jan and refunds to non-eligible applicants will be initiated to the bank accounts on 28-Jan. By 31-Jan the demat credits will be in place allowing the stock to comfortable list on the NSE and the BSE as on the 01st of February.

Let us look at some of the financials of the IPO. For FY21, AGS reported sales revenues of Rs.1,797 crore and net profits of Rs.54.79 crore implying net margins of around 3%. This is a high volume and low margin business so net margins are by default very low. The issue will be lead managed by 3 BRLMs viz. HDFC Bank, ICICI Securities and JM Financial. Link In Time Private Limited will act as the registrar to the issue.

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