Updater Services, Backed by Motilal Oswal, Receives SEBI Approval to Float IPO

12 Sep 2023 , 11:13 PM

Updater Services, backed by Motilal Oswal, has received approval from the capital markets regulator to proceed with its planned IPO. The IPO includes a fresh issuance of shares worth Rs 400 crore, along with an offer-for-sale (OFS) of 1.09 crore equity shares by promoters and investors.

Tangi Facility Solutions, a part of the promoter group, and Motilal Oswal-owned India Business Excellence Funds, will be selling shares through the OFS. It’s worth noting that the OFS size has been reduced from the earlier 1.33 crore shares to 1.09 crore shares, as indicated in the addendum to the Draft Red Herring Prospectus (DRHP) filed with SEBI on July 20, 2023.

SEBI has issued an observation letter on the IPO papers submitted by the company on September 4, signifying that the company can proceed with its IPO plans. Updater Services, based in Chennai and with a presence across India, provides integrated facilities management (IFM) services and business support services (BSS). The company asserts its position as the second-largest player in the IFM market in India.

In the business support services segment, Updater Services offers audit and assurance services through its subsidiary, Matrix. Additionally, it provides sales enablement services through subsidiaries Denave and Athena, while mailroom management services are offered through the subsidiary Avon.

The net proceeds from the fresh issue will be primarily allocated for debt repayment amounting to Rs 133 crore, working capital requirements of Rs 115 crore, and inorganic initiatives costing Rs 80 crore. The remaining funds will be utilized for general corporate purposes.

Promoters currently hold an 81.20% shareholding in the company, with public shareholders, including India Business Excellence Fund II and India Business Excellence Fund II A, owning the remaining 18.80% shares.

IIFL Capital Services, Motilal Oswal Investment Advisors, and SBI Capital Markets are the merchant bankers overseeing the issue.