IPO of AGS Transact Technologies: The IPO of AGS Transact Technologies, or IPO, was subscribed 0.89 times at the close of the first bidding day the day before. AGS Tracsact Technologies’ first share sale will be open for two more days, including Thursday, December 20, before closing on Friday. AGS Transact Technologies Limited was the first company in 2022 to open its public offering, and after a wildly successful year of IPOs in primary markets, investors are rushing to book this issue. This year is set to get even better, according to analysts, with more than 30 companies already lining up to launch their IPOs.
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 shares, according to data from the Bombay Stock Exchange or BSE. This was mainly facilitated by private buyers who signed up for the first IPO of the year within the opening. On day 1 of the public issuance, the retail portion was subscribed to 1.32 times. On the other hand, non-institutional buyers bought 1.02 times of their allotted shares, while the qualified institutional buyers portion has yet to be booked.
AGS Transact Technologies Limited plans to raise Rs 680 crore through the issuance of which Rs 204 crore has already been raised through anchor investments. The entire issue only has an offer for sale, or OFS portion, and thus the company does not receive any proceeds from the IPO issue. The company has set the price range of the IPO at Rs Rs 166 to Rs 175 per share of its share. Investors wishing to purchase shares of AGS Transact Technologies can bid on a minimum of 85 shares and thereafter in multiples of 85 shares.
AGS IPO GMP
The unlisted shares of AGS Transact Technologies were sold at Rs 190 on Wednesday, at a premium of Rs 15 at the upper end of its price range. The data for Thursday was not yet available at the time of writing this article.
AGS Transact Technologies Key IPO Strength
The main attraction of this IPO is that the company is an omnichannel integrated payment and money solution provider. AGS Transact Technologies Ltd has a customer-driven portfolio with strong capabilities to develop custom solutions
in-house solutions. Its diversified product portfolio, customer base and revenue
streams leads to opportunities for cross-selling. The company also has long-standing relationships with technology suppliers and customers.
AGS IPO valuation
On FY21 financials, the IPO is valued at 6x EV/EBITDA and 1.5x EV/revenue, compared to CMS on CMP trades at 14.5x EV/EBITDA and 3.3x EV/revenue, according to Reliance Securities. At the high end of the price range, AGSTransact would trade at a P/E multiple of 38.5xFY21 EPS, which is a premium for CMS Infosystems, AngelOne said in a note.
Should you invest?
AngelOne: AGS has a high customer concentration, with the top three customers accounting for 33.6 percent of revenue and has reported a loss for the first five months of FY2022. Given the premium valuations, high customer concentration and losses in 5MFY2022, we have a NEUTRAL recommendation for the IPO.
Reliance Securities: Given the market leadership in ATM managed services and cash management with healthy margins and high return ratios, niche product offerings, strong industry growth and discounted peer valuation, we recommend SUBSCRIBE to the issue with a positive outlook.
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