AGS TRANSACT IPO

IPO Details:

Price Band: 166-175

Cutoff Price: 175

About Company:

AGS is one of the largest integrated omni‑channel payment solutions provider in India to provide digital and cash-based solutions to banks and corporate clients. Company provides customised products and services comprising ATM and CRM outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets. AGS is the second largest company in India in terms of (i) revenue from ATM managed services under the outsourcing model, and (ii) revenue from cash management and number of ATMs replenished. Company has deployed 221,066 payment terminals and were one of the largest deployers of POS terminals at petroleum outlets in India, having rolled out IPS at over 16,000 petroleum outlets with 28,986 terminals in India.

Competitive Strengths:

1. Omni-Channel Integrated Payment and Cash Solutions Provider.

2. Customer Driven Portfolio with Strong Capabilities to Develop Customized Solutions In-house.

3. Diversified Product Portfolio, Customer Base and Revenue Streams Leading to Cross-Selling Opportunities.

4. Long-Standing Relationships with Technology Providers and Customers.

5. Dedicated In-house Infrastructure and Technological Capabilities.

6. Experienced Board of Directors and Senior Management.

Strategies:

1. Focus on Growing our Digital Payment Solutions Business.

2. Pivot from Payments-as-a-Service to Payments-as-a-Convenience through our Ongo Card and Ecosystem.

3. Focus on Automated Teller Machines (ATM) and Cash Recycler Machines (CRM) Outsourcing and Managed Services.

4. Focus on Enhancing our Integrated Technology Payments Platform.

5. Focus on Cash Management Services.

6. Expand Internationally.

Financial Performance:

Revenue of the company is stagnant. Company is profitable and cutoff price is at P/E of 38.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Offer for Sale

Competitors Comparison:

There are no competitors listed for AGS Transact Technologies. Based on financials, company price to book value is 3.7

Grey Market Premium:

Our view: GMP of the IPO is very less. I will not subscribe to this IPO.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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