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Quess Corp IPO review (Apply)

Review By Dilip Davda on Jun 24, 2016

Quess Corp Ltd (QCL) is the group company of Fairfax/Thomas Cook and one of India’s leading integrated business services providers focused on emerging as the preferred partner for handling end-to-end business functions of It’s clients. QCL offers comprehensive solutions including recruitment, temporary staffing, technology staffing, IT products and Solutions, skill development, payroll, compliance management, integrated facility management and industrial asset management services. As of March 31, 2016, it’s Key Clients include some of the world’s largest, reputable organizations, including 20 companies ranked in the 2015 Fortune Global 500 list. QCL’s Key Clients includes clients whose revenue meets one of the following criteria, (i) the client is a top 10 client in terms of revenue in a business segment, or (ii) the client contributes a minimum of 1.5% of the respective business segment revenue.

It’s service and product offerings include four broad operational segments: Global Technology Solutions
(“GTS”), People and Services (“P&S”), Integrated Facility Management (“IFM”) and Industrial Asset Management (“IAM”), which are offered under various brands. As of March 31, 2016, QCL’s operations were spread across India with 47 offices across 26 cities in India. The company also offers certain of its services in a number of jurisdictions in North America, the Middle East and South East Asia.

In Fiscal 2016 company’s top 10 clients contributed 30.40% of its total revenue while largest client, Samsung India Electronics Private Limited, contributed 7.40% of its total revenues in such period. QCL’s diversified service offerings across various industries and geographies enable it to ensure diversified revenue streams, stable cash flows and reduce vulnerability to economic cycles and geography-specific risks as well as reduce dependence on any set of significant clients. Company’s integrated service offerings also provide it with significant operating efficiencies as well as cross-selling opportunities.

For repaying it’s debt, funding capital expenditure, incremental working capital etc, the company is coming out with its maiden IPO of approx. 12618296 (based on upper price band) of Rs. 10 each via book building route in a price band of Rs. 310-317. Issue opens for subscription on 29.06.16 and will close on 01.07.16. Minimum application is to be made for 45 shares and in multiples thereon, thereafter. The issue has reserved quota of 75% for QIB’s 15% for HNIs and 10% for retail segment.

Post allotment, shares will be listed on BSE and NSE. BRLM’s to the offer are Axis Capital Ltd, ICICI Securities Ltd, IIFL Holdings Ltd and Yes Bank Ltd. Link Intime India Pvt Ltd is the registrar to the issue. Most of its equity issue is made at par except in December 2010 it issued some shares at a price of Rs. 56.68. It also issued bonus shares in the ratio of 3 for 1 in January 2016. Post IPO its current paid up equity capital of Rs. 113.33 crore will stand enhanced to Rs. 125.95 crore.

On the performance front, the company posted a turnover of Rs. 1008.15 crore with a net profit of Rs. 19.17 crore for twelve months ended 31.12.13. For 15 months period ended on 31.03.15 it has reported turnover of Rs. 2572.76 crore with a net profit of Rs. 67.22 crore. For the fiscal 2015-16 it has posted turnover of Rs. 3442.43 crore with a net profit of Rs. 88.52 crore. Thus the company has (on consolidated basis) posted CAGR of around 52 per cent in top line and around 81 per cent in bottom line.  Management is confident of continuing its quest of growth in coming years. If we attribute latest earnings on enhanced equity post IPO then the asking price is at a P/E of around 45. The company has no peer in strict terms, but recent IPO of Teamlease is considered as the nearest peer in human resource service sector that is trading at a P/E of 65 plus (as on 24.06.16).

On BRLM’s front, four BRLMs’ associated with this IPO handled 23 IPOs in past three years, of which 9 IPOs closed below the issue price on listing date as mentioned in IPO Ads.

Conclusion: This being a niche player with many firsts to its credit and having bright prospects ahead may be considered for medium to long term investment as it also enjoys first mover tag for the segment.


Conclusion / Investment Strategy

This being a niche player with many firsts to its credit and having bright prospects ahead may be considered for medium to long term investment as it also enjoys first mover tag for the segment.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Jun 24, 2016

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

Quess Corp IPO FAQs

  1. 1. Why Quess Corp IPO?

    The initial public offer (IPO) of Quess Corp Ltd offers an early investment opportunity in Quess Corp Ltd. A stock market investor can buy Quess Corp IPO shares by applying in IPO before Quess Corp Ltd shares get listed at the stock exchanges. An investor could invest in Quess Corp IPO for short term listing gain or a long term.

  2. 2. How is Quess Corp IPO?

    Read the Quess Corp IPO recommendations by the leading analyst and leading stock brokers.

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  3. 3. Quess Corp IPO what should investors do?

    Quess Corp IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Quess Corp IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Quess Corp IPO good?

    Our recommendation for Quess Corp IPO is to subscribe.

  5. 5. Is Quess Corp IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Quess Corp IPO.

  6. 6. When will Quess Corp IPO allotment status?

    The Quess Corp IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Quess Corp IPO allotment status to check.

  7. 7. When will Quess Corp IPO list?

    The Quess Corp IPO will list on Tuesday, July 12, 2016, at BSE, NSE.