Updater Services IPO booked 12% on Day 2 so far; retail book crosses halfway mark

The IPO of Updated Services continued to witness a lackluster response from the investors during the second day of the bidding process. The issue, which had opened for subscription for bidding on Monday, September 25, was booked only six per cent at the end of the first day.

Updater Services is selling its shares in the price band of Rs 280-300 apiece and with a lot size of 50 equity shares and its multiples thereon. The company aims to raise Rs 640 crore via IPO route, including a fresh share sale for up to Rs 400 crore, while an offer-for-sale (OFS) of up to 80 lakh shares worth Rs 240 crore by its existing shareholders and promoters.

According to the data, the investors made bids for 14,70,800 equity shares, or only 12 per cent, compared to the 1,19,99,999 equity shares offered for the subscription by 1.00 pm on Tuesday, September 26. The bidding for the issue will conclude on Wednesday, September 27.

The allocation for retail investors was booked at 51 per cent, while the portion for non-institutional investors (NIIs) fetched 10 per cent subscription. On the other hand, the quota for qualified institutional bidders (QIBs) was yet to attract any bids as of the same time.

Updater Services, Incorporated in 1990, offers facility management services and business support services and operates in the B2B services space. It has served 2,797 customers across various sectors at domestic and global levels as of June 30, 2023. It brags a network of 4,331 locations through 116 offices in India and 13 offices overseas.

Updater Services raised Rs 288 crore from 18 anchor investors on Friday as the company issued 96 lakh equity shares at a price of Rs 300 per shares. The issue is being managed by Motilal Oswal Investment Advisors, IIFL Securities, and SBI Capital Markets. Link Intime India is the registrar for the IPO of Updater Services.

Brokerage firms, tracking the issue, have a mixed view on Updater Services but mostly are positive in the long term. "The company is also looking to pursue inorganic growth through acquisition of high margin businesses with expansion of standalone margin. However, the company looks expensive vis a vis its peers in terms of valuation," said Canara Bank Securities with a subscribe tag.

At the upper price band, the company is valuing at P/E of 57 times with a market cap of Rs 2,001 crore post issue of equity shares and return on net worth of 9.4 per cent. Through the marquee clients, past acquisitions and operational efficiency, the company has successfully created a niche place in services, said Anand Rathi Research in its IPO note.

"Moreover, the company has aimed for high margin through value-added services with the support of the latest technology in its portfolio. On the valuation front, we believe that the company is fairly priced," it added with a 'subscribe for long term' rating.


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