Radiant Cash Management IPO Review: Radiant Cash Management Services Limited is coming up with its Initial Public Offering. The IPO will open for subscription on December 23rd, 2022, and close on December 27th, 2022. It is looking to raise Rs 387.94 Crores, out of which Rs 60 Crore will be a fresh issue, and the remaining Rs 327.94 Crore will be an offer for sale.
In this article, we will look at the Radiant Cash Management IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!
Radiant Cash Management IPO Review – About The Company
Radiant Cash Management Services Limited is an integrated cash logistics player with a leading presence in the retail cash management (“RCM”) segment of the cash management services industry in India.
The company is one of the largest players in the RCM segment in terms of network locations or touch points served as of July 31, 2021. It has a presence 12,150 pin codes in India covering all districts (other than Lakshadweep) with about 42,420 touchpoints.
The clientele of the company includes industries like private and public sector banks, insurance firms, e-commerce logistics players, railways, and retail petroleum distribution outlets.
Business verticals of the Company
- Cash pick-up and delivery: Collection and delivery of cash on behalf of the clients from the end user.
- Network currency management: Cash collection from the end users and deposit into their current accounts and subsequent transfer to the client’s accounts.
- Cash processing: Offer value-added cash processing services to our clients.
- Cash vans / Cash in transit: Offer specially fabricated armored vans, on long-term or ad-hoc hire for movement of cash or bullion within their client’s network.
- Other value-added services: Offer man-behind counter and currency chest operations to large retail stores and banks.
- ATM
The competitors of the company
SIS Limited is the only listed peer of the company that provides cash management services, among other services, as per the DRHP of the company.
Radiant Cash Management IPO Review – Financials
(Source: DRHP of the company)
Industry Overview
Cash is still a common and widely accepted payment option in India, which has been a cash economy for decades. Despite the government’s efforts to raise awareness about digital payments, and the bank’s ongoing efforts to register merchants to join the digital payments ecosystem, cash remains the preferred mode of transaction in India.
The Government of India expects nominal GDP to grow at a healthy 12% in the long run which is positively related to Cash in Circulation (CIC). Thus, the Cash in Circulation is expected to reach 50 trillion rupees by FY 2027.
The Indian cash management services market revenue grew at a CAGR of 10% during the period FY 2010 – FY2021, from Rs 10 billion to Rs 27.7 billion. The sector is expected to grow further at a pace of 19.1%.
Meanwhile, the ATM cash management market size in India is estimated at a size of Rs 14.3 Billion in FY 2021. This is expected to grow at a CAGR of 20.7% to reach a potential market size of Rs 44.3 Billion by FY 2027.
In addition to that, the Dedicated Cash Vans (DCV) market in India is estimated at a value of Rs 6.7 Billion in FY 2021 and is projected to reach a market size of Rs 14.2 Billion by FY 2027.
Strengths
- The company is one of the largest players in the RCM segment in terms of network locations or touch points served.
- The company has a diversified client base with long-standing relationships and the ability to cross-sell value-added services.
- The company has prepared and instituted a robust risk management framework, which consists of multiple layers
- The company has built a robust technological framework with key initiatives that include Automation and API integration, Client view application, QR code Scan, and Mobile Applications.
- The company is led by an experienced management team and backed by a reputed institutional investor.
Weaknesses
- The company is highly dependent on the banking sector in India to generate revenues. Any disruption in the banking sector can disrupt the business of the company.
- The emerging trend of online payment in the country can negatively impact their operations as the use and circulation of cash will decrease.
- The company is highly susceptible to operational risks such as armed robbery, end customer or third-party fraud, theft or embezzlement by employees, and reporting errors.
- The company is subject to seasonal fluctuations in the industries in which the end users operate and lower income in a peak season may have a disproportionate effect on their operations.
- The company requires statutory and regulatory permits, licenses, and approvals for its operations from time to time. Nonrenewal of this may adversely affect the business.
Radiant Cash Management IPO Review- Key IPO Information
Promoters: Col. David Devasahayam and Dr. Renuka David.
Book Running Lead Managers: IIFL Securities Limited, Motilal Oswal Investment Advisors Limited, and YES Securities (India) Limited.
Registrar To The Offer: Link Intime India Private Limited.
| Particulars | Details |
|---|---|
| IPO Size | ₹387.94 Crore |
| Fresh Issue | ₹60 Crore |
| Offer for Sale (OFS) | ₹327.94 Crore |
| Opening date | December 23, 2022 |
| Closing date | December 27, 2022 |
| Face Value | ₹1 per share |
| Price Band | ₹94 to ₹99 per share |
| Lot Size | 150 Shares |
| Minimum Lot Size | 1 (150 Shares) |
| Maximum Lot Size | 13 (1950 Shares) |
| Listing Date | January 4, 2023 |
The Objective of the Issue
The Net Proceeds from the Fresh Issue are proposed to be utilized for:
- Funding working capital requirements.
- Funding of capital expenditure requirements for the purchase of specially fabricated armoured vans.
- General corporate purposes.
In Closing
In this article, we looked at the details of Radiant Cash Management IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.
Are you applying for the IPO? Let us know in the comments below.
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