Staffing services company TeamLease Services Ltd has filed draft red herring prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (SEBI) to float its initial public offer (IPO) to raise Rs 150 crore (around $22.6 million) through a fresh issue in addition to an offer for sale by its private equity investors and promoters.
TeamLease would become a one-of-its-kind public listed HR services firm in the country in a market that is otherwise dominated by it and a few MNCs such as Manpower and Randstad.
The net offer will constitute at least 25 per cent of the post-offer paid-up equity share capital.
Here's a snapshot of the IPO
* IPO comprises fresh issue of shares to raise up to Rs 150 crore in addition to an offer for sale of around 1.5 million shares each by entities related to Gaja Capital and ICICI Venture besides 153,321 shares by the promoters.
Bankers: IDFC Securities, Credit Suisse and ICICI Securities.
Use of proceeds
* Of the total proceeds of the fresh issue, around Rs 80 crore would be used for existing and incremental working capital requirements of the company, Rs 25 crore for acquisitions and other strategic initiatives and remaining Rs 15 crore for upgrade of IT infrastructure.
* Incorporated in 2000 under the name India Life Chakravarti Actuarial Services Pvt Ltd, TeamLease’s core business is providing staffing solutions across different sectors of the industry and diverse functional areas. It is primarily associated with temping services where it provides temporary workforce to its clients in bulk on a contract. This allows clients to hire without adding to their direct employee base and this employment and business model is closely associated with sectors like manufacturing, banking, BPO and retail, among others. However, temping also encompasses senior level short-term flexi managers. TeamLease also offers permanent staffing services.
* As on March 31, 2015, the firm had provided employment to approximately 1.12 million people and as on July 2015, it had 99,090 associate employees (temps). The overall organised temping industry is estimated to have around 2 million employees.
* The firm has almost 1,214 clients, with a network of eight offices across India.
* It entered the vocational education segment by acquiring the corporate and institutional training business of Indian Institute of Job Training (IIJT) in 2012. It also acquired the staffing and manpower services business of Press Enterprises Pvt Ltd (PEPL) in 2012.
* It is promoted by Manish Sabharwal, Ashok Kumar Nedurumalli and Mohitkaran Virendra Gupta.
* For the financial year 2014-15, the firm clocked net revenue from operations of Rs 2,007 crore as against Rs 1,530 crore in the previous financial year. On the other side, net profit of the company for the fiscal ended on March 31, 2015 was reported at Rs 30.7 crore, compared with Rs 17.8 crore in the previous year.
* Gaja Capital and ICICI Venture are part exiting in the IPO.