Seshaasai Technologies IPO — Should You Subscribe Or Avoid? Read Anand Rathi's Report For Key Issue Details

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Anand Rathi Report

Seshaasai Technologies Ltd.'s IPO is scheduled to open on Tuesday, Sept. 23, and will close on Thursday, Sept. 25. A tech-driven, multi-location solutions provider offering payments, communications, and fulfillment services primarily to the BFSI sector has fixed the price band between Rs 402 to Rs 423 per equity share.

Investors can place bids starting from a minimum of 35 shares and in multiples thereafter.

The Rs 813.07-crore IPO comprises of a fresh issue of 1.13 crore shares worth Rs 480 crore and an offer for sale of 0.79 crore shares worth Rs 333.07 crore.

IIFL Capital Services Ltd. is the book-running lead manager while MUFG Intime India Pvt. Ltd. is the registrar for this IPO.

Objects of the Issue:

1. Funding capex for the expansion existing manufacturing units.

2. Repayment and/or payment, in part or full, of certain outstanding borrowing of the company.

3. General corporate purposes.

Key Strengths:

• Established Leadership Position in the Large and Regulated Payment Solutions Industry with High Barriers to Entry.

• Long Standing Relationships with a Large Customer Base.

• Comprehensive Portfolio of Customizable and Scalable Solutions.

• Pan-India Advanced Manufacturing Capabilities.

Key Strategies:

• Consolidate Leadership Position in Payment Solutions.

• Expand Offerings in the IOT and RFID Space.

• Increase Wallet Share from Customers.

• Focus on Entering into International Markets.

• Focus on Inorganic Growth through Stratergic Acquisitions.

Valuation & Outlook:

Seshaasai Technologies is a Mumbai-based technology solutions provider, established in 1993. Originally known as Seshaasai Business Forms Private Limited, the company rebranded in 2024 to reflect its expanded focus beyond printing services. It specializes in secure and scalable solutions across payments, communication, and IoT for sectors including BFSI (Banking, Financial Services, and Insurance), retail, manufacturing, supply chain, government, and renewable energy.

Seshaasai is among India’s top two payment card manufacturers, holding a 31.9% market share in FY25. It produces smart cards, metal cards, biometric cards, wearables, and payment stickers, with certifications from Visa, Mastercard, NPCI (RuPay), and PCI-DSS.

The company is among the top two payment card manufacturers in India, holding a market share of approximately 31.9% in Fiscal 2025 for credit and debit card issuance, up from 25.0% in Fiscal 2023.

The company has been able to retain existing customers while attracting the new one. They provide a scalable, customizable portfolio of Payment and Communication & Fulfilment Solutions serving primarily the BFSI sector, as well as other industries.

At the upper price band, the company is valued at 30.8x FY25 P/E, implying a post-issue market capitalization of Rs 68,441 million.

They focus on end-toend domestic manufacturing of RFID tags, devices, firmware, middleware, and IoT hardware, leveraging their technical expertise to expand production capabilities.

They aim to enhance per-customer contributions by closely collaborating to provide a broader, tailored portfolio of solutions. Additionally, they plan to expand their offerings internationally, targeting the SAARC region, parts of Africa, and Eastern Europe. Considering these factors, the IPO appears fully priced and merits a “Subscribe – Long Term” recommendation.

Key Risk:

• In Fiscals 2025, 2024 and 2023, they serviced 702, 476 and 355 customers, respectively. They generate a significant portion of their revenues from a limited number of customers, and any loss or reduction of business from these customers could reduce their revenues and adversely affect their business, results of operations, financial condition, and cash flows.

• The company’s revenues are dependent on a limited number of industry verticals, and any decrease in demand of their services in these industry verticals could reduce their revenues and adversely affect their business, results of operations, financial condition, and cash flows.

• Their contracts with customers subject them to extensive compliance requirements. Failure to comply with the terms of these contracts may lead to breach of the termination of the contracts and action against them for breach, which may adversely affect their business, results of operations and financial condition.

• They are exposed to the risks of providing solutions and services to the government projects / institutions and public sector enterprises.

• Failure of their information technology infrastructure or any breach of the information technology systems may adversely affect their business, results of operations and financial condition.

• The company’s business is dependent and will continue to depend on their manufacturing units, and they are subject to certain risks in their manufacturing process. Any slowdown or shutdown in their manufacturing operations or strikes, work stoppages or increased wage demands by their employees that could interfere with their operations could have an adverse effect on their business, financial condition and results of operations.

• They rely on the timely supply of different raw materials for manufacturing, personalizing and printing their products. Their business could be adversely affected if their suppliers fail to meet their delivery obligations or raise their prices.

• Their business may be adversely affected by costs relating to errors or product defects, and they could be faced with product liability and warranty claims.

• The emergence of new and advanced technologies could render their existing solutions obsolete or irrelevant which could adversely impact their results of operations, financial condition and cash flows.

• They import a portion of their raw materials and certain machinery from international markets. Any restrictions on imports or fluctuation in global commodity prices could adversely affect their business, results of operations, cash flows and financial condition.

Click on the attachment to read the full IPO report:

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