Radiant Cash Management Services files draft papers to raise funds via IPO

Radiant Cash Management Services Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise funds via an initial public offering.

The IPO consists of a fresh issue of shares worth ₹60 crore and an offer for sale of up to 30.13 million shares by its existing promoters and shareholders.

The OFS comprises issue of up to 10.13 million shares by Col David Devasahayam and up to 20 million shares by Ascent Capital Advisors India. Currently, Devasahayam holds a 54.40% stake in the firm while Ascent Capital has 37.221% stake in the firm.

The proceeds from the issue worth ₹20 crore will be used for funding working capital requirements. As of August 2021, the outstanding amount for working capital under fund-based and non fund based was at ₹21.42 crore and ₹21.02 crore respectively.

The firm handles cash volume of approximately ₹400 crore on a daily basis which increases sometimes to around ₹1000 crore during long weekends. The augmenting its working capital funding will enable it to scale up its capacity to handle higher daily cash volumes.

The firm also plans to use ₹23.92 crore for buying 220 specially fabricated armored vans. As of July 2021, it has utilised a fleet of 694 fabricated armored vans.

IIFL Securities, Motilal Oswal and Yes Securities are the lead managers to the issue.

The firm is an integrated cash logistics player with presence in retail cash management (RCM) segment of the cash management services industry in India and is one of the largest players in the RCM segment in terms of network locations or touchpoints served as of 31 July.

The firm provides services across 12,150 pin codes in India covering all districts (other than Lakshadweep) with about 42,420 touch points serving more than 4,700 locations as of 31 July.

For the four months ended July 2021 and fiscal year 2021, its total annual currency movement or the total value of the currency passing through its RCM operation amounted to ₹368.39 billion and ₹1.29 trillion respectively.

For fiscal year 2021, its revenue from operations was at ₹221.67 crore against ₹248.298 crore a year ago. Net profit for the period stood at ₹32.43 crore versus ₹36.50 crore last year. As of August, its total borrowings were at ₹23.22 crore.