BLS E-services shares list at a 129% premium, trade at Rs 324.20

BLSE E-services IPO: BLS E-Services marked a remarkable debut on February 6, listing at a premium of 128.9 per cent over the IPO price. The stock opened at Rs 305 on the NSE and Rs 309 on the BSE, exceeding the issue price of Rs 135. This listing closely aligned with analyst predictions of a 125-130 per cent premium.

Preceding the listing, the stock traded at a 114 per cent premium in the grey market, an unofficial platform where shares are traded before IPO allotment and continue until the listing day. Investors commonly follow the grey market premium (GMP) for insights into the potential listing price.

The Rs 311-crore IPO, which ran from January 30 to February 1, saw a remarkable oversubscription of 162.47 times, the highest among IPOs launched this year. High net worth individuals led the charge, subscribing 300.14 times, followed by retail investors at 237 times, and qualified institutional buyers at 123.3 times their respective quotas.

The IPO comprised a fresh issue of 2.3 crore shares with a price band of Rs 129-135 per share.

Proceeds from the fresh issue, amounting to Rs 97.58 crore, will be allocated to enhance technology infrastructure, develop new capabilities, and consolidate existing platforms. Additionally, Rs 74.78 crore will fund initiatives for organic growth, including setting up BLS stores, and Rs 28.71 crore will be earmarked for inorganic growth through acquisitions. The remaining funds will be utilized for general corporate purposes.

As of September 30, 2023, BLS E-Services reported a net profit of Rs 14.68 crore on a revenue of Rs 158.04 crore. Notably, its profit-after-tax (PAT) margin and earnings before interest, taxes, depreciation, and amortization (EBITDA) margin stood at 9.4 per cent and 14.23 per cent, respectively, in H1FY24.

The company heavily relies on a single customer, State Bank of India (SBI), which accounted for 59.75 per cent of revenue from operations in the six months ended September 30, 2023.

Unistone Capital served as the book-running lead manager for the IPO, with Kfin Technologies acting as the registrar. BLS International Services, Diwakar Aggarwal, and Shikhar Aggarwal are the company's promoters.

BLS E-Services specializes in providing digital business correspondence services to major banks in India, along with assisted e-services and e-governance services at the grassroots level.