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The first IPO of the year is here! AGS Transact Technologies IPO will open for subscription on January 19, 2022, and close on January 21, 2022.

The company is looking to raise  Rs 680.00 crores through the IPO. In this article, we take a closer look at the AGS Transact Technologies IPO Review 2022 and its possible future prospects. Keep Reading to find out!

About AGS Transact Technologies

AGS Transact Technologies logo

AGS Transact Technologies is one of the largest integrated omnichannel payment solutions providers in India in terms of providing digital and cash-based solutions to banks and corporate clients. It is the second-largest company in India in terms of revenue from ATM managed services. It is also the largest deployer of POS terminals at petroleum outlets in India. 

AGS Transact Technologies IPO total assets

The company has expanded internationally to offer automation and payment solutions to banks and financial institutions in other Asian countries comprising Sri Lanka, Singapore, Cambodia, the Philippines, and Indonesia. It mainly operates in 3 segments:

Payment Solutions:

This segment comprises ATM and CRM outsourcing and managed services, cash management services, iCDs, digital payment services which include toll and transit solutions, Fastlane, transaction switching services, services through POS machines, and agency banking.

The customers include ICICI Bank Limited, Axis Bank Limited, HDFC Bank Limited, and Federal Bank Limited. They have 13,959 ATMs and CRMs under outsourcing business which is owned by them and 18,408 ATMs and CRMs under the managed services business owned by customers.

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Banking Automation Solutions:

This segment comprises the sale of ATMs and CRMs, currency technology products and self-service terminals, and related services and upgrades. They have approximately 50 banking customers, including ICICI Bank Limited, HDFC Bank Limited, and Axis Bank Limited.

Other Automation Solutions:

This business segment encompasses the sale of machines and related services to customers in the retail, petroleum, and color segments. They supply automation products and provide implementation services, system integration, remote management, support, and help desk services.

The customers include More Retail Private Limited, HPCL, IOCL,  BPCL, Kansai Nerolac Paints Limited and Berger Paints India Limited.

AGS  profit after tax

Major competitors of the company include:

AGS Transact Technologies competitors
(Source: DRHP of AGS Transact Technologies )

Industry Overview

In India, The number of ATMs (including white label ATMs) operating in India’s ATMs market increased from 212,061 as of March 31, 2016, to 238,588 as of March 31, 2021, at a CAGR of 2.39%. The number of transactions in India stood at 46,405.8 million and the value of transactions was around ₹1,471,579.0 billion in the financial year 2021. 

The revenue of India’s ATM managed services market declined by approximately 7% f from ₹121,984.7 during the financial year 2020 to ₹113,408.4 million during the financial year 2021 due to restrictions and lockdowns in India on account of the COVID-19 pandemic.

The Indian digital payment space has seen extraordinary growth in the last few years, with the volume of transactions increasing at a CAGR of 36%. New and innovative payment products such as UPI, NETC, FASTag, and BBPS have contributed to the growth of the digital payment industry.

Strengths of AGS Transact Technologies

  • One of the largest integrated omnichannel payment solutions providers in India.
  • Strong Capabilities to develop and provide customized solutions to customers.
  • Having a presence in different industries led to a Diversified Product Portfolio, a strong Customer Base, and Multiple Revenue Streams
  • Strong long-standing relationships with leading global technology providers, such as Diebold Nixdorf has enhanced their market position
  • Skilled and dedicated In-house Infrastructure and Technological Capabilities help them achieve economies of scale.

Weaknesses of AGS Transact Technologies

  • The COVID-19 pandemic-related lockdown remains a threat as it may lead to the temporary closure of their POS merchants, partners, and vendors.
  • Reluctance to use cash in transactions, and therefore less withdrawal of cash from ATMs, in general, might impact their business.
  • The company is vulnerable to cyber-security threats and potential breaches.
  • A highly regulated business environment and susceptible to be affected by any adverse  government policies 
  • The company generates a significant portion of its revenue from the fees they charge for their services which is largely dependent on the volume of transactions.

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Grey Market Information

Shares of AGS Transact Technologies traded at a 13.14% premium on January 14th. The shares were trading at Rs 198. This gives a premium of Rs 23 over the issue price band of Rs 166- 175.

Key Information on AGS Transact Technologies IPO

AGS share Holding

Mr Ravi B. Goyal and Vineha Enterprises Pvt Ltd are the promoters of the company. The Book Running Lead Managers are ICICI Securities Limited, HDFC Bank Limited, and JM Financial Limited. Link Intime India Private Limited has been appointed as the registrar to the issue.

ParticularsDetails
IPO SizeRs 680.00 Cr
Fresh Issue0
Offer for Sale (OFS)Rs 680.00 Cr
Opening dateJanuary 19, 2022
Closing dateJanuary 21, 2022
Face Value₹10 per equity share
Price Band₹166 to ₹175 per equity share
Lot Size85 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateFebruary 1, 2022

The objective of the Issue

The IPO aims to utilize the net proceed for the following:

  • To carry out an offer for sale by selling shareholders.
  • To realize the listing benefits of equity shares on the stock exchange.

In conclusion

In this article, we covered the AGS Transact Technologies IPO Review 2022. The Initial Public Offering opens on January 19, 2022, and closes on January 22, 2022.  For investors, it can be a good opportunity to look into the company and apply for the IPO after analyzing the strengths and weaknesses of the company.

Are you applying for the IPO? Let us know in the comments below. Happy Investing!

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