Seshaasai Technologies Limited, a Mumbai-based payments solutions provider, has taken a step toward its market debut by filing its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on December 27. The company, known for its innovative offerings in contactless payments, customer communication, and smart traceability, aims to raise Rs 600 crore through an Initial Public Offering (IPO).

IPO Details

The IPO will consist of a fresh issue of equity shares worth Rs 600 crore and an offer-for-sale (OFS) component of 78.74 lakh equity shares. The company has disclosed that its shares will carry a face value of Rs 10 each. In the OFS segment, key stakeholders Pragnyat Pravin Lalwani and Gautam Sampatraj Jain will each sell 39.37 lakh shares.

The company plans to allocate the IPO proceeds strategically. Rs 195.328 crore will be used to expand its existing manufacturing facilities, Rs 300 crore will be utilized to repay or prepay certain outstanding borrowings, and the remaining funds will be directed toward other operational and business needs.

IIFL Capital Services Limited, ICICI Securities Limited, and SBI Capital Markets Limited are the book-running lead managers for the IPO, while Link Intime India has been appointed as the registrar.

About Seshaasai Technologies

Seshaasai Technologies provides advanced payment solutions across diverse sectors, including education, wellness, retail, and transport. Its primary clientele, however, lies within the Banking, Financial Services, and Insurance (BFSI) segment. Seshaasai’s product portfolio extends beyond payments, offering solutions for customer communication and smart traceability.

Financial Performance

The financial performance of Seshaasai Technologies reflects growth:
Quarter Ended June 2024: The company reported a net profit of Rs 40.48 crore, with revenue from operations at Rs 360.50 crore.
Fiscal Year 2024: Profits soared to Rs 169.27 crore, a substantial increase from Rs 108.09 crore in FY23 and Rs 37.35 crore in FY22.
Net Worth: As of June 2024, the company’s net worth stood at an impressive Rs 506.34 crore.

Risks & Challenges

Despite its strong financials and market position, Seshaasai Technologies faces risks that could impact its business.
Dependence on Key Customers: A significant portion of the company’s revenue is derived from a select group of clients in the BFSI sector. The loss of any major client or a reduction in revenue from these key customers could adversely affect the company’s performance.
Market Competition: Operating in a competitive landscape, Seshaasai must continuously innovate to retain its edge and cater to evolving customer needs.

Seshaasai Technologies’ decision to go public is a testament to its ambition to strengthen its market presence and operational capabilities. The allocation of IPO proceeds toward capital expenditure and debt repayment indicates the company’s focus on sustainable growth and financial prudence.