BLS E-Services Limited is a technology enabled digital service provider, providing (i) Business Correspondents services to major banks in India, (ii) Assisted E-services; and (iii) E-Governance Services at grass root levels in India. Through the robust network they provide access points for delivery of essential public utility services, social welfare schemes, healthcare, financial, educational, agricultural and banking services for governments (G2C) and businesses (B2B) alike in addition to a host of B2C services to citizens in urban, semi-urban, rural and remote areas. The merchants act as the interface with the consumers and play a critical role in delivery of goods and services on the ground. Presently, the merchants are organised in two categories i.e. BLS Touchpoints and BLS Stores. All merchants registered with them are treated as BLS Touchpoints and they have access to offer multiple services being extended by them. BLS Stores are BLS branded stores which offer the entire suite of offerings to the consumers including availability of select goods on a sample basis supplied by e-commerce players which can be ordered and procured by the consumers after having a touch and feel experience of such goods. As on September 30, 2023, they have 98,034 BLS Touchpoints, which includes 1,016 BLS Stores. Through the tech-enabled integrated business model, they provide digital and physical products and services in the G2C, B2C, B2B categories in semi-urban, rural and remote areas where penetration of internet is low and citizens need assistance in availing basic technology enabled services. They organize the business along three primary business segments, (i) Business Correspondents Services; (ii) Assisted E-services; and (iii) E-Governance Services. A key stakeholder in each of the bus. As a part of the operations, they act as business correspondents ('Business Correspondents') to provide banking products and services on behalf of banks to people while performing a variety of services including opening savings, recurring deposit accounts, cash deposits, withdrawals, remittance, transfer, bill collection services, through the Subsidiaries, namely ZMPL and Starfin. They generate revenue from monthly commission; transaction-based commission; and registration Fees. Further, they also provides a variety of Assisted E-Services through retailers and digital stores also known as BLS Touchpoints, including PoS services, ticketing services, assisted e-commerce services, etc. The revenue generated under this business segment is through registration fees; transaction-based commission on goods & services supplied; and support service charge. They also provide a variety of assisted e-services through retailers and digital stores also known as BLS Touchpoints, including PoS services, ticketing services, assisted e-commerce services, etc. Additionally, they facilitate delivery of various e-governance initiatives of the State Governments in India by providing various information communication technology ('ICT') enabled citizen centric services ('E-Governance Services') through the merchants also known as BLS Touchpoints to the citizens. The E-Governance Services, enable the provision of citizen-centric and front-end services through BLS Touchpoints ranging from birth and death certificates, PAN and Aadhar registrations, property registrations, and other citizen centric services in a transparent and accountable manner. The Company has entered into an MOU with the National e-Governance Division ('NeGD') for agent assisted delivery of unified mobile application for new-age Governance ('UMANG') services into its digital platform, offering convenient access of E-Governance Services. The revenue structure revolves around a transactional framework. For every service delivered, a transaction fee is levied, along with a fixed government fee. The government fee is remitted to the government department in real-time, facilitated through the payment wallet maintained with the government department. The transaction fee, on the other hand, is validly apportioned, ensuring distribution to BLS Touchpoints and them, as per the pricing dynamics established in each district as per contract. As per financial performance, BLS E-Services Limited has posted total income / net profits of Rs 65.23 Cr / Rs 3.15 Cr (FY21), Rs 98.40 Cr / Rs 5.38 Cr (FY22), Rs 246.29 Cr / Rs 20.33 Cr (FY23) and Rs 158.05 Cr / Rs 14.68 Cr (Q2 FY24). So as per previous financials data, company has shown exceptional growth. Company has an average EPS of Rs 1.89 and average RoNW of 26.26% for last three fiscals. Issue is priced at a P/BV of 7.01 as per NAV of 19.25 as on 30.09.23. If we attribute latest earnings of FY22, FY23, and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 227.99, 60.33 and 41.77 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. Unistone Capital Private Limited : This is 6th Main Board IPO from this BRLM and also handled 9 SME IPOs in last 3 year. From last 3 Main Board IPOs, all opened above issue price on the day of listing and from last 7 SME IPOs, all opened above issue price on the day of listing. As of now, from last 3 Main Board IPOs, all are trading above issue price and from last 7 SME IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 24.01.2024 ) As per financials, BLS E-Services Limited has shown good growth, RoNW is 16.46% and P/E is respectively 227.99, 60.33 and 41.77 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is a technology enabled digital service provider, which is highly competitive and fragmented segment. But there is good growth opportunity and performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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