Mumbai-based Solutions Provider Seshaasai Technologies Limited files DRHP with SEBI for IPO

Mumbai-based Seshaasai Technologies Limited, a technology driven multi-location solutions provider, has filled its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (SEBI), to raise funds through Initial Public Offering (IPO).

The IPO is a mix of fresh issue of shares of up to Rs. 600 crore and an offer for sale (OFS) of up to 7,874,015 equity shares each by Pragnyat Pravin Lalwani and Gautam Sampatraj Jain. The offer also includes a reservation for a subscription by eligible employees and a discount is being offered to eligible employees bidding in the employee reservation portion.

The company, in consultation with the BRLMS, may consider a further issue of specified securities, aggregating up to Rs. 120 crore as pre-IPO placement. If the pre-IPO placement is completed, the amount raised under the pre-IPO placement will be reduced from the fresh issue.

The proceeds from the fresh issue to the extent of Rs. 195.33 crore will be used for funding capital expenditure for the expansion of existing manufacturing units and Rs. 300 crore will be used for Repayment and / or prepayment, in part or in full, of certain outstanding loans of the Company; and general corporate purposes.

The Offer is being made through the book-building process, wherein not more than 50% of the net offer is allocated to qualified institutional buyers, and not less than 15% and 35% of the net offer is assigned to non-institutional and retail individual investors respectively.

Seshaasai Technologies is a technology-driven, multi-location solutions provider specializing in payment solutions, communication, and fulfillment services. Catering primarily to the banking, financial services, and insurance (BFSI) sector, the company places data security and compliance at the heart of its offerings. Leveraging proprietary platforms, Seshaasai delivers scalable, recurring solutions that are integral to the operations and deliverables of India’s BFSI sector, as noted in the F&S Report referenced in its DRHP. Beyond BFSI, the company also offers Internet of Things (IoT) solutions to a diverse clientele across various industries.

Seshaasai is a leading player in India’s payment card manufacturing space, holding a 34.5% market share in credit and debit card issuance in Fiscal 2024, up from 23.7% in Fiscal 2022 (Source: F&S Report). It is also recognized as one of the largest manufacturers of cheque leaves in the country (Source: F&S Report).

The company operates across three primary business verticals: Payment Solutions, Communication and Fulfillment Solutions, and IoT Solutions. Over the years, Seshaasai has leveraged its expertise in printing technologies, advanced manufacturing equipment, and problem-solving capabilities to deliver customized solutions to sectors such as education and global direct mailing.

Seshaasai’s technology-driven approach is anchored by platforms such as RUBIC, eTaTrak, IOMS, and izeIOT. It provides integrated and customized services through a nationwide network comprising 24 manufacturing units across seven locations in India, as of June 30, 2024. Each unit is self-sufficient, equipped with advanced machinery, raw materials, and skilled manpower to meet local requirements. The company also operates nine strategically located godowns in Karnataka, Kerala, Telangana, and Maharashtra.

As one of the few vendors in India with approved facilities for producing plastic, metal, sustainable, and biometric cards, as well as wearables and payment stickers, Seshaasai demonstrates robust manufacturing capabilities. Its units have the capacity to produce over 0.47 million cards and 1.25 million RFID tags daily (as of June 30, 2024). The company emphasizes innovation through two dedicated R&D labs in Bengaluru and Faridabad, driving the development of new and customized solutions.

Seshaasai’s facilities are certified by global payment schemes, the National Payments Corporation of India (NPCI) for RuPay cards, and the Payment Card Industry (PCI) for data security in card production. Additionally, its cheque manufacturing units are certified by the Indian Banks Association (IBA). These certifications underscore its adherence to stringent IT, cyber, and physical security standards.

Serving a diverse range of clients, Seshaasai counts major public and private banks, insurance companies, depositories, and fintech firms among its customers. In Fiscal 2024, it provided services to 10 of 12 public sector banks, 9 of 11 small finance banks, and 15 of 21 private banks in India. Additionally, it served 9 of 32 general insurance companies and 12 of 24 life insurance firms. BFSI customers, known for their selectivity, value Seshaasai’s reputation for trust, quality, and the ability to meet their specific service requirements (Source: F&S Report).

Seshaasai Technologies standalone revenue from operations grew at a CAGR of 52.21% from Rs. 672.56 crore in Fiscal 2022 to Rs. 1558.26 crore in Fiscal 2024. Profit for the year grew from Rs. 37.35 crore in Fiscal 2022 to Rs. 169.28 crore in Fiscal 2024 growing at a CAGR of 112.88%.

For the three months ended June 30, 2024, consolidated revenue from operations stood at Rs. 360.50 crore and profit after tax stood at Rs. 40.49 crore.

IIFL Capital Services Limited, ICICI Securities Limited and SBI Capital Markets Limited are the book-running lead managers and Link Intime India Private Limited is the registrar to the issue. The equity shares are proposed to be listed on the BSE Limited and National Stock Exchange of India Limited.