Patna-based Security and Intelligence Services (India) Ltd on Friday raised Rs 350.81 crore ($54.7 million) via share sale to anchor investors ahead of its three-day public offering that opens Monday.
Sovereign wealth fund Abu Dhabi Investment Authority (ADIA) led the anchor allotment by acquiring close to 16% of the shares on offer while Deutsche Bank International and BNP Paribas also bet on the private security services firm. Amundi Asset Management, Ashburton Investments, Altera Absolute Investments, and Malabar Investments were some of the other foreign investors that took part in the anchor allotment.
Indian asset managers like Reliance Mutual Fund, Sundaram Mutual Fund, Birla Sun Life Mutual Fund, Tata Mutual Fund, Baroda Pioneer Mutual Fund, and IDFC Mutual Fund, and insurers such as Reliance Nippon Life Insurance Co and Canara HSBC Oriental Bank of Commerce Life Insurance Co were the other anchor investors.
Anchor investors are institutional investors who accept a one-month lock-in for a sizeable allocation of shares. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.
Private equity firm CX Partners-backed SIS is seeking a valuation of Rs 5,960 crore ($925 million) through the IPO. The public offering will comprise a fresh issue of 4.44 million shares worth Rs 362.25 crore (at the upper end of the price band), besides sale of 51.2 million shares worth Rs 417 crore by promoters and CX Partners. Of the total 51.2 million shares to be sold via the secondary route, CX is selling 3.4 million.
At the upper end of the price band, the IPO size works out to Rs 779.58 crore, resulting in a 13.1% stake dilution on a post-issue basis. CX Partners will sell 4.75% stake in the company and hold about 9.81% following the issue.
SIS, which claims to be India’s second-largest private security services firm, received regulatory approval for its IPO on 12 January. The company had filed its draft prospectus in September last year.
The proposed IPO was to comprise a fresh issue to raise Rs 362.25 crore and an offer-for-sale by CX Partners, promoters and other shareholders. However, the Securities and Exchange Board of India (SEBI) had kept the IPO proposal in abeyance till violations under the Companies Act, 1956 were resolved. The company had issued shares to more than 49 people through private placement in nine instances, above the limit stipulated by the Companies Act.
In January, VCCircle had reported that SIS had addressed the problems related to regulatory violations following SEBI’s concerns.
SIS will be the country's first security services firm to go public, and its IPO will be keenly watched by other private equity-backed peers such as Tops Security Ltd.
Apart from security services, SIS also offers cash logistics services to banks, home-alarm monitoring and response services, and facility management services to corporate clients. It has a network of 229 branches and employs 1.36 lakh personnel across India. It also operates in Australia.
Axis Capital, ICICI Securities, IIFL, Kotak Mahindra Capital, SBI Capital, Yes Securities and IDBI Capital are managing the issue.