Updater Services IPO: Shares list at 5% discount over issue price

Business support services firm Updater Services saw a muted response on the listing day on the bourses, with the stock listing at a 5% discount of  ₹285 on the National Stock Exchange and ₹299.9 on the Bombay Stock Exchange against the issue price of ₹300.

On the listing day, the stock touched an intra-day low of ₹285. At the time of filing of the report, 12,95,188 shares worth a value of ₹3,798.53 crore were being traded on the NSE. At the current share price of ₹292.90, down ₹7 or 2.33%, the m-cap of the company stands at ₹1,953.72 crore.

On the listing of Updater Services, Shivani Nyati, head of wealth, Swastika Investmart Ltd, says overall, the listing of Updater Services is disappointing for investors. "However, the company's high IPO price, mixed financial performance, and associated risks likely contributed to the negative response in the market. Additionally, current market sentiments could also be a contributing factor to such a listing."

The public offer of Updater Services was booked nearly 2.9 times on the last day of bidding on September 27, receiving bids for 3.5 crore equity shares against issue size of 1.2 crore shares. Segment-wise, the retail portion was booked 1.32 times, NIIs by 0.85 times, and QIBs by 4.48 times. The company had reserved not less than 75% of the shares for QIBs, not more than 15% for NIIs, and not more than 10% for retail investors.

Updater Services had set a price band of ₹280 to ₹300 per equity share, while raising ₹640 crore at the upper end of the offer price. Out of ₹640 crore, ₹400 crore were raised through the issuance of fresh equity shares, while the rest ₹240 crore were garnered via offer for sale (OFS) by selling shareholders including promoter Tangi Facility Solutions.

Before the IPO, Updater Services raised ₹288 crore from 18 anchor investors at the upper price band of ₹300 per equity share. Anchor Book included marquee domestic institutional investors like ICICI Prudential, BNP Paribas, Aditya Birla Sunlife, Motilal Oswal, etc., and foreign institutional investors such as Copthall Mauritius, Franklin India, Societe Generale, CitiGroup Global Market and Nomura Singapore.

The company intends to use the net proceeds raised through the fresh issue towards repayment or prepayment of certain of its outstanding borrowings, amounting to ₹133 crore. Further, it intends to use ₹80 crore towards pursuing unidentified inorganic initiatives, ₹115 crore towards funding its working capital requirements, and the balance amount towards general corporate purposes.