Payments solutions provider AGS Transact Technologies Ltd has restarted work on its initial public offering (IPO), its third attempt to go public, said two people aware of the development.
AGS Transact offers services such as greenfield end-to-end deployment and management of ATMs, management of existing ATMs, deployment of point of sale terminals, transaction switching and processing services, cash in transit, cash pick-up and others.
In March 2015, AGS Transact had filed papers with markets regulator Securities and Exchange Board of India (Sebi) to raise up to Rs1,350 crore through an initial share sale, which did not materialize.
Earlier in 2010, AGS had filed its draft IPO documents with the regulator.
“The company has kick started work on its IPO very recently. Investment banks ICICI Securities and Axis Capital are working on the IPO this time. The company is expected to raise under Rs1,000 crore through the share sale,” said one of the two people cited earlier, requesting anonymity as he is not authorized to speak to the media.
In its last attempt to go public, the company had hired a syndicate comprising Axis Capital, ICICI Securities, Citigroup, HDFC Bank and Kotak Mahindra Capital, according to the previous DRHP (draft red herring prospectus) filed by the company.
Emails sent to AGS Transact did not elicit any response. Emails sent to Axis Capital and ICICI Securities too went unanswered.
Work on the IPO comes at a time when the company’s promoters are in talks to raise funds to buy out private equity investors.
On 16 April, Mint reported that AGS Transact promoter Ravi Goyal was in advanced talks with the Piramal Group to raise funds to buy out its PE investors TPG Growth and Actis Capital.
Goyal owns 55.2% in AGS Transact, TPG holds 26% and Actis arm Oriole Ltd owns 16.44%. TPG and Actis made their first round of investments in AGS in 2011 and 2012, respectively.
Founded by Goyal in 2002, AGS Transact’s ATM outsourcing division has a client base of over 80 banks.
AGS, with over 60,000 ATMs, has a 25% market share of the total installed base of about 207,000 ATMs, according to Reserve Bank of India data in December 2017.
For financial year 2015-16, AGS Transact reported revenue of Rs1,213 crore, as compared to revenue of Rs1,204.4 crore in the previous year, according to a February 2017 note by rating agency India Ratings and Research (Ind-Ra).
In the white label ATM market, which are not set up by banks, AGS Transact competes with Euronet, FSS and Hitachi Payment Services.
Other private equity investors that have invested in payments related businesses include ICICI Venture, Baring Asia Private Equity, Premji Invest and Sequoia Capital.
In 2015, Baring Private Equity Asia acquired CMS Info Systems, the largest cash management company in India, for around Rs2,000 crore.
CMS Info Systems in September filed its draft documents for an IPO.
