23 Dec , 2022 By : Monika Singh
Radiant Cash Management IPO opened for subscription for retail investors on Friday, 23 December. The issue will conclude next week on 27 December. The price band of the issue has been fixed at Rs 94-99 per share. The integrated cash logistics player is looking to raise Rs 388 crore via the maiden public issue. The IPO comprises a fresh issuance of shares worth Rs 60 crore and an offer for sale (OFS) of Rs 328 crore by promoter and investor. Half of the offer is reserved for qualified institutional buyers, 15% for high networth individuals (HNIs) and the remaining 35% for retail investors.
Ahead of the IPO, the company raised Rs 116.4 crore from anchor investors. Retail investors can bid for a minimum of 1 lot comprising 150 shares worth Rs 14,850 and a maximum of 13 lots or 1,950 shares worth Rs 1,93,050. Choice Broking has assigned ‘subscribe with caution’ on the IPO, while Reliance Securities, Ventura Securities and Marwadi Financial Services have ‘subscribe’ ratings on the issue. Radiant Cash Management IPO grey market premium (GMP) was at Rs 3 on Friday.
IPO Open Date: 23 December
IPO Close Date: 27 December
Basis of Allotment: 30 December 30
Refunds: 2 January 2023
Credit to Demat Account: 3 January 2023
Radiant Cash Management IPO Listing Date: 4 January 2023
“Radiant has the ability to cross sell value-added services such as network currency management and cash processing services. Based on FY22 earnings the company is valued at 27.8x P/E, 17.2x EV/ EBITDA and 3.5x EV/Sales. In view of the leading integrated cash logistics player, strong financial track record with healthy double-digit operating margins (EBITDA margin of >20%) and double-digit return ratio (RoE of 27.3%), strong presence across India, multiple key marquee clients, focus on continuous technology improvement and attractive valuation, we recommend ‘Subscribe’ to the issue.”
“At higher price band, Radiant is asking for an EV/sales multiple of 3.1 times, which is at significant premium to the peer average of 1.3 times. The issue is highly-priced. However, considering the company’s dominant market positioning in the domestic RCM market, its wide coverage across the tier-2 & tier3 cities and potential future growth from these regions, and operating leverage in the business, we assign a “Subscribe with Caution” rating for the issue,” the brokerage note stated.
“Company’s diversified client base with a long-standing relationship and ability to cross-sell value-added services has robust operational risk management with significantly built-up technology to optimise operational profitability has steady financial growth & experienced management team and backed by a reputed institutional investor. Hence, looking after all above, we recommend “Subscribe” on the issue for the long term,”
“Radiant is an integrated cash logistics player with a leading presence in the RCM industry and is one of the largest players in the RCM segment in terms of network locations or touch points. The growth in the organized retail sector as well as the corresponding outsourcing potential is expected to be prime factors for the development of the RCM market in India. Radiant has a track record of strong financial performance and delivering returns to shareholders. Radiant is backed by a reputed institutional investor, Ascent Capital, who has invested in the company in FY15. At the upper band of Rs 99, the issue is valued at a PE of 26.2x based on FY22 to its EPS of Rs 3.77. We are recommending “Subscribe for Long Term” for this issue,” the brokerage noted.
“We believe that India being an underbanked and rapidly developing country, the outlook for banks and their cash management will continue to remain strong. Furthermore, considering the long-term growth opportunity in the Indian e-commerce space, cash movement from retail touchpoints is expected to grow significantly in the coming years. Hence, we recommend a Subscribe rating for Radiant CMS IPO,” analysts said.
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