BackQuess Corp appoints three banks to manage IPO
The firm has hired IIFL Capital, ICICI Securities and Axis Capital to manage its initial share sale
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Mumbai: Quess Corp Ltd, a staffing and facility management firm owned by Thomas Cook (India) Ltd, has appointed three domestic investment banks to manage an initial public offering (IPO), said two people aware of the development.
The company intends to raise ₹ 700 crore through the IPO.
The firm has hired IIFL Capital, ICICI Securities Ltd and Axis Capital Ltd to manage its initial share sale, according to one of the two people mentioned above. Both spoke on condition of anonymity.
“Quess Corp has been growing rapidly over the last few years and they are very aggressive when it comes to acquiring companies to add new business lines. They have acquired five companies in the last one year," said the second person, explaining the rationale behind the fund raising.
The firm will use the IPO proceeds to fund its existing businesses as well as to acquire companies to augment its current business lines and to enter new ones, he added.
Quess Corp chairman and managing director Ajit Issac confirmed that the company is pursuing an IPO. However, he declined to comment on the specifics of the share sale.
In an exchange filing on 19 March, Thomas Cook had stated that the board of Quess Corp had discussed various long-term funding options including an IPO.
An email questionnaire sent to Axis Capital, ICICI Securities and IIFL Capital on Friday morning did not elicit any response.
Thomas Cook acquired Quess Corp in February 2013. Quess was earlier known as IKYA Human Solutions.
Quess has pursued an aggressive acquisitions strategy to boost growth. In June this year, the firm entered an agreement to acquire a 49% stake in Transfield Services (Qatar) WLL, which operates in the oil and gas market in Qatar. In February, it acquired the Indian facility management business of American multinational Aramark, which operates in hospitality and healthcare facility management
In November 2014, Quess entered an agreement with Fairfax Financial Holdings to buy a 49% stake in Fairfax’s subsidiary MFXchange Holdings Inc. Thomas Cook is a subsidiary of Fairfax. MFX, based in New Jersey, US, provides hosted technology applications and outsourcing solutions for the US commercial property and casualty insurance industry.
Last year, it also acquired Canadian information technology and engineering professional staffing firm Brainhunter Companies Llc and Chennai-based industrial asset management firm Hofincons Infotech and Industrial Services Pvt. Ltd.
Quess is not the only staffing services firm that is looking to go public.
Teamlease Services Pvt. Ltd is looking to raise ₹ 500 crore through an IPO. So far this year, 22 companies have filed draft IPO papers.
“The better companies in the staffing services business have seen growth rates of almost 20%. The growth of the industry is being driven by the fact that more and more companies do not want to take on the statutory liabilities of hiring a large workforce," said Joseph Devasia, managing director, India, at Antal Network, a head-hunting firm, adding that it is almost a $1 billion industry in India.
IT recruitment and blue collar workers form the biggest chunk of the market, he said. “Some of the emerging opportunities in the business include recruitment of interim CXO level staff such as chief financial officers or HR (human resource) heads," Devasia added.
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