Thursday, February 22, 2024

BLS E-Services filled its pockets, strong return of 130% on listing, what to do to recover profits

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BLS E-Services Listing Day Strategy: Successful applicants in the IPO of BLS E-Services, a subsidiary of BLS International and running a web-enabled service portal, were successful today. The company’s stock has made a strong entry in the stock market today. The stock of BLS e-Services was listed on BSE today at Rs 309, while the IPO price was Rs 135. That is, on the listing (BLS E-Services Listing), the stock has given a return of about 130 percent or Rs 174 per share to the investors. According to the subscription received by the IPO, its strong listing was expected. The question is whether to sell the shares after listing or stay in it.

Investors had given huge price

The IPO of BLS e-Services was subscribed more than 162 times. 75 percent of the IPO was reserved for Qualified Institutional Buyers (QIB) and it was subscribed 123.30 times. Whereas 10 percent share was reserved for retail investors and it was filled 236.53 times. 15 percent was reserved for non-institutional investors (NII) and it was subscribed 300 times.

How is the growth outlook of the company?

According to brokerage house Swastika Investmart, the company is a digital services provider, and could be a beneficiary of the government’s Digital India initiative. The company operates on an asset-light business model, has a wide reach of customers and a business model with diverse sources of revenue. The company has also registered continuous growth in its financial position. However, some concerns are that the company’s operating history is limited, making it difficult to evaluate its business and growth. Second, it depends on a single customer for most of its revenue. Third, its geographical concentration. The company is valued at P/E of 44 times, which seems fine.

According to brokerage house Reliance Securities, the company also has a successful track record of acquisitions to enter into complementary businesses and expand its product portfolio and services capabilities to enter new geographies. The brokerage believes that the company is seeing good growth going forward due to strong tailwind, asset light business model and strong parentage.

According to brokerage house Reliance Securities, BLS e-Services has an asset light business model with multiple cross-selling and up-selling opportunities, network effect and wide reach for customer acquisition. It also has a business model with experienced senior management, diverse sources of revenue and modest customer execution and retention costs.

BLS E-Services Financial

In FY23, the company’s income increased by 151 percent year-on-year to Rs 246 crore, while profit increased by 278 percent to Rs 20.33 crore. Total income for the 6 months ending September 2023 was Rs 158 crore and profit was Rs 14.68 crore.

(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of digitnews. There are risks in the market, so take expert opinion before investing.)

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