AGS Transact Technologies IPO: The AGS Transact Technologies IPO, or initial public offering, was subscribed 0.89 times at the end of the first day of bidding a day back. The initial share sale of AGS Tracsact Technologies will be open for two more days including Thursday, December 20, before it closes on Friday. AGS Transact Technologies Limited was the first company in 2022 to open its public offer, and after a hugely successful year of IPOs at the primary markets, investors have been rushing to book this issue. According to analysts, this year is going to be even better, with over 30 companies already waiting in line to float their initial public offerings.
AGS Transact Technologies IPO Subscription Status
As of Day 1 of the opening of the AGS IPO, investors booked 2.51 crore shares against the issue size of 2.86 crore equity shares, 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 1.32 times on Day 1 of the public issue. On the other hand, non institutional buyers bough 1.02 times of the shares allotted for them, while the qualified institutional buyers portion is yet to be booked.
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 Rs 166 to Rs 175 per equity share. Investors who want to buy AGS Transact Technologies shares can bid for a minimum of 85 equity shares and in multiples of 85 shares thereafter.
AGS IPO GMP
The unlisted shares of AGS Transact Technologies were retailing at Rs 190 on Wednesday, at a Rs 15 premium on the upper limit of its price band. The data for Thursday was not available at the time of writing this article.
AGS Transact Technologies IPO Key Strength
The main attraction of this IPO is that the company is an omni-channel integrated payment and cash solutions provider. AGS Transact Technologies Ltd has a customer driven portfolio with strong capabilities to develop customised
solutions in-house. Its diversified product portfolio, customer base and revenue
streams leads to cross-selling opportunities. The company also has long-standing relationships with technology providers and customers.
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. At the higher end of the price band AGSTransact would be trading at P/E multiple of 38.5xFY21 EPS which is at a premium to CMS Infosystems, said AngelOne in a note.
Should You Invest?
AngelOne: AGS has high client concentration with top three customers accounting for 33.6 per cent of revenues and has reported a loss for the first five months of FY2022. Given premium valuations, high client concentration and losses in 5MFY2022 we have a NEUTRAL recommendation on the IPO.
Reliance Securities: In view of the market leadership in ATM managed services and cash management with healthy margins and high return ratios, niche product offerings, strong industry growth and valuation at a discount to peers, we recommend SUBSCRIBE to the issue with a positive view.
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