Radiant Cash Management Services Limited an integrated cash logistics player with leading presence in retail cash management ('RCM') segment of the cash management services industry in India and is one of the largest players in the RCM segment in terms of network locations or touch points served as of March 31, 2022. They provide services across 13,044 pin codes in India covering all districts (other than Lakshadweep) with about 55,513 touch points serving more than 5,388 locations as of July 31, 2022. The marquee clients include some of the largest foreign, private and public sector banks, and the end user of services include some of the largest e-commerce companies, retail chains, NBFCs, insurance firms, ecommerce logistics players, railways and retail petroleum distribution outlets. For the four months ended July 31, 2022, Fiscals 2022, 2021 and 2020 total annual currency movement, or the total value of the currency passing through RCM business, amounted to Rs 485.85 billion, Rs 1,303.80 billion, Rs 912.22 billion, and Rs 1,290.77 billion. In Fiscal 2021, they were the Company with the second highest EBITDA margin, ROCE and ROE amongst organised players in the cash management services segment. Company caters to broad set of outsourcing requirements pertaining to cash management services for banks, financial institutions, organized retail and e-commerce companies in India. They operate the business across five verticals, namely 1) Cash pick-up and delivery2) Network currency management (also known as cash burial in industry parlance)3) Cash processing4) Cash vans /cash in transit5) Other value added services. Company has a client base covering some of India's largest foreign, private sector and public sector banks. Amongst the key clients are Axis Bank Limited, Citibank, Deutsche Bank Limited, HDFC Bank Limited, ICICI Bank Limited, Kotak Mahindra Bank, Standard Chartered Bank, State Bank of India, The Hongkong and Shanghai Banking Corporation Limited and Yes Bank Limited. Four of the top five clients in Fiscal 2021, have been with them for a period of more than five years. Their end user segments are fairly well diversified across multiple sectors, including e-commerce companies, retail chains, NBFCs, insurance firms, ecommerce logistics players, railways and retail petroleum distribution outlets. Some of the end users of the services include Bajaj Finance Limited, Equitas Small Finance Bank Limited, Ecom Express Private Limited, Delhivery Private Limited and Hiveloop Logistics Private Limited. As of July 31, 2022, they had a fleet of 739 specially fabricated armoured vans through a combination of leased vehicles, short term contractual basis and own vehicles. As of July 31, 2022, they own 739 fabricated armoured vans. This allows them to service clients across the length and breadth of the nation along with the support of a team consisting of 8,780 persons, including employees and contractual workers. As per financial performance, Radiant Cash Management Services Limited has posted total income/net profits of Rs 251.78 Cr / Rs 36.76 Cr (FY20), Rs 224.16 Cr / Rs 32.53 Cr (FY21) and Rs 286.97 Cr / Rs 37.67 Cr (FY22) and Rs 84.38 Cr / Rs 15.43 Cr (Q1FY23). So as per last three years data, company has shown muted growth. Also trade receivables in FY 22 is around 27%, which is high. They have posted an average EPS of Rs 3.55 and average RoNW of 27.27% for last three fiscals. Issue is priced at a P/BV of 6.46 as per NAV of 15.33 on 30.06.22. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 28.21 and as per annualized FY23 earnings P/E is around 17.22, which looks fully priced. As per RHP, peers comparison is in shown above table . On BRLM's front, 3 lead managers are associated with this IPO, and have handled around 45 IPOs in last three fiscals.IIFL Securities Limited : This is 35th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 IPOs, 1 is trading below issue price and other are trading above issue price. ( As on 20.12.22 )Motilal Oswal Investment Advisors Limited :This is 7th IPO from this BRLM. From last 6 IPOs, 1 opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 6 IPOs 3 are trading below issue price and other are trading above issue price. ( As on 20.12.22 )YES Securities (India) Limited Limited :This is 6th IPO from this BRLM. From last 5 IPOs, 2 opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 5 IPOs 2 are trading below issue price and other are trading above issue price. ( As on 20.12.22 ) As per financials, Radiant Cash Management Services Limited has shown muted growth, RoNW is 27.34% and P/E is respectively 28.21 and 17.22 as per FY22 and annualized FY23 earnings, which looks fully priced. Company is in RCM ( Retail Cash Management ) segment, which may become obsolete in next 15-20 years as use of UPI and other online payment modes are increasing multi fold and GoI has also introduced eRupee. Government is also very focused to promote online transactions and reduce use of cash in Bharat. Also we may find better listed players with cheaper valuations. Performance of BRLMs are average. So, we give AVOID rating for this IPO.
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