Updater Services IPO Alert

IFM market in India has been growing steadily over the last decade and is set to witness significant growth momentum over the next 5 years. The total IFM market in India in FY23 is valued at INR 100,386.7 crore and around 39.3% of this is outsourced to 3rd party companies. Between FY18 to FY23, the outsourced Indian IFM market grew at a CAGR of 9.5%. In the Financial Year ended March 31, 2023 the outsourced IFM market was estimated to be worth INR 39,480.0 crore. The demand for IFM services has increased as people’s preferences for a safe, clean, and secure environment have grown. The government’s plan to develop 100 smart cities will result in a surge in infrastructure creation. The Union Budget for the Financial Year ended FY24 has proposed a total CAPEX outlay of INR 10 trillion, which is 33% increase year-on-year and 3.3% of the total GDP. Given the current expansion and increase in investments in IT, IteS and BFSI segments, the demand for professional IFM services is increasing which will benefit companies like Updater Services.

Updater Services is a leading, focused, and integrated business services platform in India offering integrated facilities management (IFM) services and business support services (BSS) to its customers, with a Pan-India presence. The company is the second largest player in India’s IFM market and has the widest service offering in the industry, making it a unique and differentiated player in the market. Within its BSS segment, it offers Audit and Assurance services through its Subsidiary, Matrix is a leading Audit and Assurance company for dealer/distributor audits, and retail audits and its strong branch reach and field associate reach has driven the company to reach the top spot in India, with a market share of 19.2% in the Financial Year ended FY23. The company also offer employee background verification check services through Matrix and in this segment, Matrix is the third largest company in India with a share of 5.40% in FY23. In addition, the company provides sales enablement services through its Subsidiaries Denave and Athena. Denave is the largest player in this segment with a market share of 20.1% in India in FY23. In addition, the company offers mailroom management services through its Subsidiary, Avon which is a market leader in India with a share of 11.1% in the mailroom management services market in FY23.

The company’s total income increased by 41.00% from INR 1497.89 crore in FY22 to INR 2112.09 crore in FY23. This was driven by a growth in its (i) revenue from contracts with its varied customers, (ii) other income, and (iii) finance income. However, the company’s restated profit for the year decreased by 39.68%, from INR 57.37 crore in FY22 to INR 34.61 crore in FY23.

Objects of the issue:
1. Repayment of borrowings
2. Funding Working Capital
3. Pursuing inorganic initiatives
4. General corporate purposes