Quess Corp posts stellar show on debut, shares rise 58.68%1 min read . Updated: 13 Jul 2016, 01:42 AM IST
Quess Corp stock opened at `499 and touched a high and a low of `508.6 and `480.05, respectively, before closing 58.68% higher at `503 on BSE
Shares of Quess Corp Ltd jumped more than 58% on debut on Tuesday, after the integrated business services provider’s ₹ 400 crore initial public offering (IPO) saw a subscription of a whopping 144.50 times last week.
The stock opened at ₹ 499 and touched a high and a low of ₹ 508.6 and ₹ 480.05, respectively. The scrip closed at ₹ 503 on BSE, up 58.68% from its offer price of ₹ 317, fixed at the upper end of its ₹ 310-317 price band.
Quess Corp’s promoter Thomas Cook India Ltd closed at ₹ 207.55 on BSE, down 5.81% from its previous close, while India’s benchmark Sensex rose 0.66% to close at 27,808.14 points.
“This (the listing) is more or less in line with our expectations," said Gaurav Dua, head of research at Sharekhan Ltd.
“There was lot of demand for this IPO, and it was heavily oversubscribed. It was also priced at 35-40% discount to its comparable listed company—Teamlease Services Ltd," Dua added.
Quess Corp’s IPO had witnessed the fifth highest overall subscription, in percentage terms, for any IPO since 2000.
The IPO proceeds will be utilized towards repayment of debt, capital expenditure as well as working capital requirements, and funding acquisitions and other strategic initiatives.
“Quess, in our view, is well-positioned to maintain high revenue/Ebitda (earnings before interest, taxes, depreciation and amortization)/EPS (earnings per share) growth, driven by expected industry growth across all business segments and scope for margin improvement," said Govind Agrawal, an analyst at brokerage firm Prabhudas Lilladher Pvt. Ltd, in a note on 29 June. Agrawal had said that while valuations may appear expensive at around 41 times FY16 EPS, that is well-supported by high revenue growth and scope for margin expansion, and recommended a “subscribe" to the IPO.
Quess Corp is a business services provider in which 69.55% stake is owned by Thomas Cook (India), which, in turn, is owned by Canadian billionaire Prem Watsa’s Fairfax Financial Holdings Ltd (FFHL). FFHL owns a 67.82% stake in Thomas Cook.
Quess Corp offers business services, including recruitment, temporary staffing, technology staffing, information technology products and solutions.
The company reported a revenue of ₹ 3,442.4 crore in fiscal year 2016 (12 months), compared with ₹ 2,572.8 crore in fiscal year 2015 (15 months).
Net profit of Quess Corp. grew to ₹ 88.5 crore in the fiscal year 2015-16, compared with ₹ 67.2 crore for fiscal year 2014-15.