Payment solutions provider AGS Transact Technologies Ltd, which was backed by private equity firms TPG Growth and Actis until a few months ago, has received the regulatory nod to float an initial public offering (IPO).
The Securities and Exchange Board of India (SEBI) issued final observations to AGS Transact’s IPO proposal on 26 October, information on the regulator's website shows. AGS had filed its draft red herring prospectus (DRHP) with SEBI in mid-August.
With this, SEBI has approved 62 IPO proposals so far in 2018. Last year, it had cleared 46 IPO proposals.
AGS’ Rs 1,000-crore IPO comprises fresh shares worth Rs 400 crore apart from equity of promoter Ravi Goyal and other individual shareholders worth Rs 600 crore.
AGS Transact may also raise Rs 150 crore in pre-IPO placement as part of the overall public offering process.
The payment solutions company is making a third attempt to go public. The firm had previously filed its draft proposals with SEBI in 2010 and 2015.
In 2015, US-headquartered TPG Growth and British firm Actis as well as AGS’s promoter had planned to sell shares in a planned IPO of Rs 1,350 crore.
In June this year, AGS’s promoters bought the 42% stake held by TPG Growth and Actis. The promoter and promoter group now own 98.23% stake in the company while employees own the remaining via stock options.
TPG Growth held a 25.96% stake in AGS while Actis owned 16.44% as on 31 March 2017, according to VCCEdge, the research arm of News Corp VCCircle.
VCCircle reported in August that TPG and Actis had walked away with disappointing returns after exiting their investment.
ICICI Securities, Axis Capital, HDFC Bank, IIFL Holdings, IndusInd Bank and Nomura Financial Advisory and Securities (India) Pvt Ltd are managing the company’s IPO.
Set up in 2002, AGS is one of the leading providers of end-to-end cash and digital payment solutions and automation technology.
The firm primarily operates in three areas – payment solutions, banking automation solutions, and other automation solutions (for customers in the retail, petroleum and colour sectors).
AGS provides customised products and services comprising ATM outsourcing and cash management, as well as digital payment solutions including merchant solutions, transaction processing services and mobile wallets.
It installs and manages ATMs and mobile point-of-sale (PoS) terminals. It also supplies dispensers for the petroleum and colour sectors.
AGS is the second-largest company in India in terms of ATMs managed, revenue from ATM-managed services and number of ATMs provided with cash management services, besides being the fourth-largest company in India in terms of revenue from cash management.
The company counts ICICI Bank, Axis Bank, HDFC Bank, RBL Bank, BTI Payments, Hindustan Petroleum Corporation Limited, Indian Oil Corporation, Lanka IOC, Utkarsh Small Finance Bank Limited, and Ly Hour Pay Pro and DaraPay in Cambodia as its key domestic and international clients.
As on June 2018, the company had installed, maintained or managed a network of approximately 72,000 ATMs, provided cash management services to approximately 28,900 ATMs through its subsidiary, Securevalue India Limited (SVIL), installed approximately 71,000 merchant POS and 37,000 cash billing terminals, automated approximately 8,000 petroleum outlets and installed around 54,000 colour dispensing machines.