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Business News/ Markets / Stock Markets/  BLS E-Services share price down 40% from their peak, slips below IPO price; should you invest now?
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BLS E-Services share price down 40% from their peak, slips below IPO price; should you invest now?

BLS E-Services share price traded 30% below listing price. IPO raised around ₹300 crores used for expansion. Stock in downtrend due to overvaluation, advised to avoid. Negotiating acquisitions for inorganic growth.

On Monday, BLS E-Services share price ended 2.21% lower at ₹263.55 apiece on BSE.Premium
On Monday, BLS E-Services share price ended 2.21% lower at 263.55 apiece on BSE.

BLS E-Services share price has been trading roughly 30% less than its listing price of 366. The BLS E-Services share price made an impressive start on February 6, 2024 where it opened at 305 on the NSE, 125.93% more than the 135 issue price. BLS shares debuted at 309 apiece on BSE, which was 128.89% more than the issue price. Since March 5, the price of the stock has been below its listing price.

The firm successfully debuted on the stock market in February this year with an IPO of around 300 crores. According to the company's exchange filing, the net proceeds from the IPO would be used to support the establishment of BLS Stores, consolidate the current platform, develop the technical infrastructure, and pursue inorganic possibilities.

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The three days of the BLS E-Services IPO saw a resounding reaction from non-institutional and retail investors alike. According to NSE data, the subscription status for the BLS E-Services IPO on day three was 162.48 times.

According to Dr. Ravi Singh, SVP - Retail Research Religare Broking Ltd, digital service provider BLS-E Services Limited provides e-government services at the grassroots level in India, supported e-Services, and business communication services to major Indian banks.

One should avoid making fresh positions in this stock because every rise is being sold, which indicates the stock is in a downtrend. Fundamentally, the company is a bit overvalued, so one must avoid it as of now, and for an existing position, one must take a strict stop at 260, advised Singh.

On Monday, BLS E-Services share price ended 2.21% lower at 263.55 apiece on BSE.

Also Read: Aegis Logistics stock surges 9% to new high after Q4 results, up 23% in 2 sessions

BLS E-Services - Road Ahead 

As part of its inorganic expansion plan, the business is reportedly mulling an acquisition for the current fiscal year (FY25), according to a PTI news report.

The firm, according to a PTI news report, has 21,000 banking correspondent centres around the nation and has partnerships with 15 banks, including State Bank of India, Bank of Baroda, and HDFC Bank.

Chairman of BLS E-Services Ltd. Shikhar Aggarwal told PTI that they are currently negotiating with two to three companies. There is ongoing due diligence. To promote inorganic growth, the company intend to make acquisitions during the current fiscal year.

As per the news report, Aggarwal told PTI that the firm has set aside 28.71 crore for the acquisition and that the funds were collected through an earlier this year 311 crore initial public offering.

Furthermore, by growing its BLS Stores, the firm hopes to achieve organic growth, according to Shikhar.

For the fiscal year that ended in March 2024, the firm recorded a 65% rise in net profit, coming in at 33.53 crore as compared to 20.33 crore the previous fiscal year.

From 73.62 crore in the previous fiscal year to 78.71 crore this year, the company's total income increased. In the financial year, the company's total expenditures climbed to 64.29 crore from 62.05 crore in FY23.

Also Read: Multibagger stock to buy? Deven Choksey predicts big upside in Share India share price in one year

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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Published: 27 May 2024, 03:54 PM IST
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