SIS India Plans To Use IPO Proceeds To Pare Debt
SIS plans to raise around Rs 780 crore through its IPO.
Security and Intelligence Services (India) Ltd. plans to use part of the proceeds from its initial public offering to pare debt it took on to acquire an Australian company last year.
“Around Rs 200 crore would be used to repay some of the financing which we had borrowed last year for an acquisition (Dusters) and also some working capital loans, so that will bring down the debt proportionately to that extent,” Vamshidhar Guthikonda,
president (mergers and acquisitions), Security & Intelligence Services (India), told reporters in Mumbai on Tuesday in a pre-IPO conference.
The security services company had a total debt of Rs 762.5 crore as of March 2017, which translates to a debt-to-equity ratio of 1.37, according to the company’s red herring prospectus. After the fresh issue, this ratio is expected to come down to 1.
The Delhi-based company plans to raise around Rs 780 crore through its initial public offer. The price band for the IPO, which is a combination of a fresh issue and an offer for sale, is fixed at Rs 805-815 apiece.
IPO Opens On July 31
The company will raise Rs 362.3 crore from its fresh issue. Shareholders will also offload over 51.2 lakh shares in the three-day IPO that opens on July 31. Promoter and private equity group CX Partners will sell 34.7 lakh shares through the offer for sale, which will see its stake in the company go down to 9.8 percent.
Axis Capital, ICICI Securities, IIFL Holdings and Kotak Mahindra Capital Company are the book running merchants for the offer.
A provider of private security and facility management, SIS has 251 branches across 124 cities in India. Its business is focussed on three key verticals: security services, cash logistics and facility management services. Electronic security, home alarm monitoring and pest control also contribute to a small portion of its revenue.
With an employee base of 1.48 lakh in India and another 5,754 in Australia, SIS is the second largest security services firm in India, according to the red herring prospectus.
“The demand for security services in India is going up and SIS has proved its credentials to grow 1.5 times the market growth. We will continue to do that in the coming years as well,” said the Group Managing Director Ruturaj Kishore Sinha.
